Dinsmore Steele Business Blog
Gain valuable insight into small businesses' challenges and how to solve them.
Are you getting hosed by your Professional Employer Organization?
If you are in a Professional Employer Organization, then you already know the upside. What you might not know is if you are getting the best price for your PEO. If you don’t know if you are, then you should read on.
Most people join a Professional Employer Organization and don’t ever think about the fees and costs associated with their PEO billing. Better yet a lot of times, people join a PEO and have no idea what their actual PEO fees are. And in many cases no idea how to figure out their fees.
How much should you pay for a PEO?
Ever wonder how much you should be paying for a Professional Employer Organization (PEO)? We examine the PEO's services and diffreniate the value versus the price.
PEOs and The Admin Fee
PEOs charge Administration Fees for their services. Some charge a flat administration fee per employee per month (PEPM) and others charge a percentage of payroll (POP). Which is better?
Does your PEO charge a Percentage of Payroll for your Administration Fee?
PEO makes a lot of sense and we’ve helped numerous companies find the right one, but paying a Percentage of Payroll as your Administration Fee is always a bad idea. So if you are in a PEO that charges a Percentage of Payroll, it’s in your best interest to find out what you’re paying exactly and to have it fixed.
What Should Your Administration Fee be for your PEO?
This question is asked numerous times, and it’s not easy to answer because there are a lot of factors that go into what your administration fee should be. For those of you new to PEO or unfamiliar, the administration fee is what you pay the PEO for their services. To fully understand what you should pay in administration fees, you must first understand how a PEO makes money.
PEO Administration Fees
All PEOs charge a fee for their service it’s called an Administration Fee. One critical point to consider how they charge the Administrative Fee and what it exactly includes. Some PEOs charge a flat fee per month per employee (PEPM) and others charge a percentage of payroll (POP). It’s important to know which is which, but more important is to know the difference.