PEO cost calculator

Compare PEO fees with going direct

The defaults use Justworks' published October 2026 prices for PEO Plus and its non-PEO payroll product, plus an illustrative $8 per employee per month for benefits administration. Replace them with your own quotes. Add anything the PEO covers that you'd otherwise pay for separately, like an HR advisory service, a workers' comp policy or compliance software, under other yearly costs.

What a PEO's fee covers, and what it doesn't

Some PEOs charge a percentage of payroll instead of a flat fee, commonly a few percent of gross wages. For a well-paid team, that can cost far more than a flat fee: 3% of a $120,000 average salary is $300 per employee per month. If your quote is a percentage, convert it to dollars per employee per month before comparing.

Worked examples

The bigger cost: health premiums

For most teams, the PEO fee isn't the biggest number. Health premiums usually are, and they're billed at the PEO's rates. PEO plans can be a good deal for very small groups that wouldn't get group pricing on their own, and a poor one for groups that could do better on their own. A 25-person team at KFF's 2025 average single premium spends about $233,000 a year on medical coverage; a 10% difference in premium is worth more than half the PEO fee.

PEO renewals also tend to rise faster than the fee. Our guide to PEO renewal increases covers why, and PEO health insurance rates explains how they're set.

Converting a percentage-of-payroll quote

To compare a percentage quote with a flat fee, multiply the rate by your average monthly pay per employee. The same rate costs very different amounts at different salaries.

Costs that don't show up in the headline fee

• Benefits markups. Some PEOs add a margin to health premiums or charge a separate benefits administration fee. Ask for the carrier's rate and the PEO's charge separately.
• Workers' comp markups. When workers' comp is bundled, the rate you pay may be higher than a policy you'd buy alone.
• State unemployment rates. Some PEOs report unemployment tax under their own account, at their rate rather than yours, which can be higher or lower.
• Minimums and setup fees. Monthly minimums can make a PEO expensive for very small teams.
• Exit costs. Termination notice periods, final-month fees and the payroll tax reset if you leave a non-certified PEO mid-year.

How to get a quote you can compare

1. Send the same census to every PEO Employees, salaries, states, ages and current enrollment by tier.
2. Ask for fees and premiums separately A single all-in number per employee makes it impossible to see what you're paying for administration.
3. Get the full benefits rate sheet Rates for every plan and tier, the renewal date and any rate guarantee.
4. Ask about renewals How did the PEO's health rates change at the last two renewals? Fees are usually stable; premiums are where costs move.
5. Price the unbundled alternative A payroll provider, a benefits plan bought directly and any HR help you need. Enter both in the calculator above.

PEOs and multi-state teams

One of the strongest reasons to use a PEO is hiring in many states at once. Each new state means registering for payroll withholding and unemployment tax, and often a state-specific benefits or leave rule. A PEO handles the registrations under its own accounts. If you leave, you'll need your own registrations in each state, which takes a few weeks to set up.

Benefits are the other multi-state problem. A small group plan is usually based in one state, and its network may be thin elsewhere. That's often what keeps remote teams in a PEO. An ICHRA solves it differently: each employee buys an individual plan where they live, with an allowance from the company. Our guide to health insurance for remote employees compares the options. Many teams that leave a PEO keep a modern payroll provider for the multi-state tax work and move benefits to an ICHRA, which separates the two decisions and lets each one be priced on its own.

When a PEO is worth it

• Worth it: very small teams with no HR person, companies hiring in many states at once, and businesses in high-risk industries that need workers' comp they can't easily buy alone.
• Worth questioning: teams of 20 or more, teams with an HR or operations lead, and companies whose health renewals have jumped.
• Watch the exit: leaving a PEO mid-year resets payroll tax wage bases unless the PEO is IRS-certified, and benefits have to be replaced on the same day. Plan the switch for January 1 or your renewal date.

For the full decision, see is a PEO worth it and how to leave a PEO.

Leaving a PEO with Prescience

Most companies that leave a PEO keep a payroll provider and replace the benefits. That's the part we handle: Diamond as a group plan, or Choice as an ICHRA, set up to start on the day your PEO coverage ends.