Payroll Vs. PEOs (Staff Leasing)
Many companies use a PEO for their payroll and worker’s compensation insurance without fully understanding their companies’ needs. Below is a brief comparison chart that will introduce you to the benefits of each system so that you can make the best informed decision for you and your business.
|Employee Ownership||Employees are the responsibility of the corporate owner.||Employees are co-owned, however, since the corporate owner oversees the daily business, it is still responsible for certain aspects of employee behaviors and actions.|
|Workers Compensation||Company is responsible for retaining and paying for workers’ comp;
Pay1 can handle workers comp for you.
Pay1 offers a pay-as-you-go system which avoids surprise billing at the end of the year.
|PEOs charge a percentage of gross payroll, as well as add an administration fee to handle workers comp.
If a workers’ comp issue arises, the PEO will take responsibility for the employee.
|Benefits||Pay1 can handle most corporate benefits including: Medical Insurance, Supplementary Insurance, 401(k) or 403(b), and more.
Pay1 charges low monthly rates to handle benefits. Clients are also able to handle their own benefits thru our system at no additional cost.
|PEOs handle most corporate benefits. PEOs tag on an additional percentage of the cost for administrative fees.|
|Cost||Pay1’s payroll service typically saves its clients 30-40% on their payroll costs.
Clients who switch from PEOs typically save up to 55% on their costs.
|PEOs charge a percentage of a company’s gross payroll and add percentage rates into transactions facilitated thru their service, such as workers’ comp, medical insurance, etc. The typical percentage cost is approximately 1-3% and can be as high as 5% of gross payroll.|