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PEO Buying Guide: Pricing and Fees

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In our final installment highlighting our PEO Buying Guide, we’re discussing pricing and what questions to ask to learn more about what you’re actually paying for when utilizing a PEO for your company.

Pricing and Fees

Next, let’s take a look at some of the different ways a PEO can make money. This can range from a simple administrative fee, to hidden markups, to brokerage fees on health insurance. Some PEOs complicate this information, making it difficult to know exactly what you’re paying for. Here are some questions to help you learn more about a PEO’s payment structure.

  • Admin or Management Fee – Will you pay per employee or a percentage of payroll? How is this calculated? When and how does it change over time?

  • SUTA/FUTA – What are the rates you will pay for SUTA/FUTA with the PEO, and how does this compare to your current rates? Does the PEO mark up these amounts for revenue, or is it passed through at cost?

  • Startup costs – What are the startup fees to set up your account? Are there employee onboarding or off-boarding fees? Does the PEO charge an extra fee when you have employees in more than one state?

  • Workers’ Compensation – Does PEO markup Workers’ Compensation premiums from the carrier? If so, by how much?

  • 401K – Are the fees for 401K administration built into the administrative fee, or charged separately?

  • Are there markups or additional fees for transactional services like background checks, I-9 verifications, etc?

  • Do you charge hourly rates for coaching, consulting, or advice?

  • Are there markups on health insurance costs?

  • Do you have markups on health insurance broker fees/commissions? How about markups on supplemental benefits (life, Aflac, etc) costs?

  • Are there technology fees buried in the contract?

Ask for References

Now that you’ve done your research, spoken with representatives, and have narrowed down your list of potential PEOs, an important next step is to ask for references in order to get an honest understanding of how a company like yours benefits from utilizing their PEO. Here are some questions to ask during those conversations:

  • What led you to choose this PEO for your company?

  • What services have been the most beneficial to you and your employees?

  • How communicative is their team? Are they easy to get in touch with when needed and do they provide the assistance needed at the time?

  • Have there been any difficulties in your partnership? If so, how have they been dealt with?

Have questions or want to learn more about what FullStack PEO can do for you and your employees? Schedule a call today.