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Payroll Administration

How can a PEO reduce my payroll cost?

Using a PEO for payroll administration can result in significant cost savings for businesses. The exact amount of savings may vary depending on the size and needs of your business, the PEO you choose, and the services you use. However, some sources estimate that the average cost savings from using a PEO is $1,775 per year per employee or up to 35% on HR costs.

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How can a PEO's payroll services benefit me?

A payroll administration program with a PEO is a type of payroll processing service that is offered by a professional employer organization (PEO). PEOs are third-party companies that take over all or some of the HR responsibilities for their client businesses, including payroll, benefits administration, and compliance. This frees up the client business to focus on its core operations.

With a payroll administration program with a PEO, the PEO will handle all of the tasks associated with payroll, such as:

  • Calculating employee wages
  • Withholding taxes
  • Depositing taxes
  • Generating paychecks
  • Distributing paychecks
  • Tracking employee hours
  • Enrolling employees in benefits
  • Processing benefit claims
  • Communicating with employees about payroll and benefits

The PEO will also be responsible for ensuring that the client business is in compliance with all applicable payroll and tax regulations.

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What are some of the benefits of working with a PEO?

A PEO, or Professional Employer Organization, is a service that helps small and medium-sized businesses with various aspects of human resources, such as payroll, benefits, compliance, and risk management. Working with a PEO can have many benefits for both employers and employees. Some of these benefits are:

  • HR Administration: PEOs can handle various HR administrative tasks, including payroll processing, tax withholding and reporting, benefits administration, and employee recordkeeping. By outsourcing these functions to a PEO, businesses can save time and resources, allowing them to focus on core business operations.
  • Employee Benefits: PEOs often offer access to a wide range of employee benefits, such as health insurance, dental and vision coverage, retirement plans, flexible spending accounts, and employee assistance programs. PEOs can negotiate favorable rates and packages due to their collective purchasing power, which can provide more comprehensive and affordable benefits for employees.
  • Compliance and Risk Management: Employment laws and regulations can be complex and constantly changing. PEOs have expertise in HR and employment regulations, helping businesses stay compliant with various laws, including those related to wage and hour, discrimination, and employee leave. They can provide guidance on compliance matters, assist with policy development, and handle employee relations issues, reducing the risk of legal penalties and disputes.
  • Payroll and Taxes: PEOs handle payroll processing, including calculating wages, tax withholdings, and issuing paychecks to employees. They also handle tax reporting and remittance, ensuring businesses meet their tax obligations accurately and on time. PEOs can assist with year-end tax forms, such as W-2s, relieving businesses of the administrative burden and potential errors associated with payroll and tax compliance.
  • Employee Relations and Training: PEOs can provide guidance and support on employee relations matters, such as performance management, disciplinary actions, and termination procedures. They can assist with developing employee handbooks, policies, and procedures, fostering a positive work environment and helping businesses handle employee issues effectively. PEOs may also offer training programs for employees, covering topics such as harassment prevention, workplace safety, and compliance.
  • Recruitment and Onboarding: PEOs can assist with the recruitment and onboarding processes, helping businesses find and attract qualified candidates. They may offer applicant tracking systems, assist with job postings, conduct background checks, and handle the necessary paperwork for new hires. This support streamlines the hiring process and ensures compliance with employment laws.
  • Employee Development: Some PEOs offer training and professional development programs for employees, including online learning resources and skill-building workshops. These programs can enhance employee skills and contribute to overall workforce development.
  • Scalability and Flexibility: PEOs can support businesses during periods of growth or downsizing. They can handle the administrative tasks associated with hiring new employees, managing benefits enrollment, and processing terminations. PEOs provide flexibility to businesses, allowing them to adapt to changing workforce needs without significant administrative burdens.
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What is a payroll administration program with a PEO?

A payroll administration program with a PEO is a type of payroll processing service that is offered by a professional employer organization (PEO). PEOs are third-party companies that take over all or some of the HR responsibilities for their client businesses, including payroll, benefits administration, and compliance. This frees up the client business to focus on its core operations.

With a payroll administration program with a PEO, the PEO will handle all of the tasks associated with payroll, such as:

  • Calculating employee wages
  • Withholding taxes
  • Depositing taxes
  • Generating paychecks
  • Distributing paychecks
  • Tracking employee hours
  • Enrolling employees in benefits
  • Processing benefit claims
  • Communicating with employees about payroll and benefits

The PEO will also be responsible for ensuring that the client business is in compliance with all applicable payroll and tax regulations.

What are some of the benefits of working with a PEO?

  • Save time and money: Payroll administration can be complex and time-consuming, especially if you have to deal with multiple tax jurisdictions, compliance regulations, and employee benefits. By outsourcing your payroll to a PEO, you can save time and money on payroll processing, tax filing, reporting, and auditing. You can also avoid costly penalties and fines for payroll errors or non-compliance.
  • Access to HR expertise: A PEO has a team of HR professionals who can help you with payroll-related issues, such as wage and hour laws, garnishments, deductions, and employee classification. They can also provide you with guidance and support on other HR matters, such as hiring, training, performance management, and employee relations. You can leverage the PEO's HR expertise to improve your employee satisfaction and retention.
  • Offer better benefits: A PEO can help you offer better benefits to your employees, such as health insurance, retirement plans, dental and vision plans, and more. A PEO can leverage its large pool of clients to negotiate lower rates and better coverage from insurance carriers and benefit providers. This can help you attract and retain top talent in your industry.
  • Reduce risk: A PEO can help you reduce your risk exposure by sharing the legal liability for payroll administration and compliance. A PEO can also help you manage workers' compensation claims and provide risk management services, such as safety training, loss prevention, and drug testing. By working with a PEO, you can minimize your exposure to lawsuits, audits, and investigations related to payroll and employment issues.
  • Focus on your core business: By outsourcing your payroll administration to a PEO, you can free up your time and resources to focus on your core business functions. You can concentrate on growing your revenue, developing your products or services, and serving your customers. You can also enjoy more flexibility and scalability in managing your workforce.

What can I save by using a PEO for payroll administration?

Using a PEO for payroll administration can result in significant cost savings for businesses. The exact amount of savings may vary depending on the size and needs of your business, the PEO you choose, and the services you use. However, some sources estimate that the average cost savings from using a PEO is $1,775 per year per employee or up to 35% on HR costs.