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Any entrepreneur can tell you that owning a business comes with a ton of responsibilities. If you can find a faster and more efficient way to handle almost any task, it is a worthwhile investment.
In an effort to increase efficiency, many business owners are choosing to use either a PEO or payroll service provider to run their payroll with over 173,000 small and mid-sized businesses using PEO services in the U.S.
If you have decided that outsourcing payroll management is right for your business, you are likely left with the choice between partnering with a PEO or using a payroll service provider. Join us to explore the fundamental differences between these two options and determine which is right for your unique business needs.
A professional employer organization (PEO) is a co-employer and functions like an off-site human resources (HR) department to provide cost-effective HR and payroll services to businesses.
The PEO co-employs its client’s personnel, creating a three-way relationship among the PEO, the client company, and the client company’s employees. In doing so, the PEO provides small and medium-size businesses access to an integrated HR department that delivers a vast array of services and benefits while mitigating employer-related liabilities.
PEOs can offer many benefits to your business, including:
Many PEOs will not work with companies that have less than five employees because it is not worth the time and resources for them as the PEO or you as the potential client.
Top eight reasons to partner with a PEO for payroll services (and more!)
A payroll service provider (PSP) handles your business’s payroll management and tax compliance. A PSP pays your employees based on the pay schedule that you set, and many offer additional limited services to minimize administrative tasks, such as tax filing and withholdings.
Payroll service providers can provide your business with advantages, such as:
PSPs typically only provide payroll services, so if your business is looking for other services as well, a PSP is likely not the right choice. Some PSPs may offer tax compliance services as an add-on, but they do not serve as an outsourced HR department like a PEO.
Hiring a PSP does not minimize any business risks or compliance concerns. They do not share any legal responsibilities or liability regarding tax compliance. If your payroll provider does not pay taxes on time or accurately, your business is fully accountable, whereas with a PEO, both companies share liabilities.
When your business has decided to outsource its payroll management or HR department, there are many aspects to consider. There are benefits that both PSPs and PEOs can bring to your business, but if you want any other service apart from payroll management, a PEO is the right choice.
Whereas hiring a PSP is simply rendering a service, hiring a PEO entails entering into a true business partnership. The co-employment aspect of a PEO creates a unique relationship with your company because they share some legal responsibility to help your business reduce risks.
PER has provided outsourced HR services to small and mid-sized businesses across Central Florida for over 25 years. Our comprehensive services include payroll management, benefits administration, and more.
With PER, our clients find value in our compliance and advising services that go far beyond simply running payroll. We are your integrated, off-site HR department that fully supports you with a vast array of quality services that mitigate your employer-related liabilities.
We pride ourselves on providing personalized assistance to create a true partnership by acting as an extension of your current HR department. When we partner with your business, we reduce your HR burden to allow you more time to manage the HR aspects you still maintain complete control of such as employee performance, grievance issues, and recruiting efforts .
Unlike the automated, conglomerate PEOs, our PEO professionals are always available to answer your questions or respond to your concerns as a genuine part of your HR team.
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Contact us today to learn more!
1: NAPEO | Industry Statistics
Ready to grow your business?