Payroll vs PEO

Many business owners use PEO for workers’ compensation as well as their payrolls without really understanding the needs of their own companies. To help our clients understand the difference between PEO and Payroll, we, here at Bridge HRO, have written a brief comparison between the two that will inform you about the benefits of each process so that you can make an informed decision when it comes to you and your company.

1. Workers’ Compensation:

Payroll: The Company is responsible for paying for workers’ compensation. Bridge HRO only handles the workers’ compensation. We also offer a pay-as-you-go system to avoid any unnecessary and surprise billings at the years’ end.

PEO: if there is an issue in the workers’ compensation, the PEO will take full responsibility for that employee. PEOs also charge a percentage of the total payroll while also adding an administrative fee to handle workers’ compensation.

2. Employee Ownership:

Payroll: the owner is responsible for all the employees of the business.

PEO: employees of a particular business are co-owned by the owner as well as the PEO. However, the company owner is responsible for all of his employees’ behaviors and actions.

3. Cost:

Payroll: by hiring Bridge HRO, you typically save 30-40% on the costs of the company’s payroll. Clients who switch from PEOs tend to save up to 55% on their total payroll costs.

PEO: PEOs tend to charge a percentage of the company’s total payroll and adds additional fees and charges depending on the services they offer, such as workers’ compensation, medical insurance etc.

4. Benefits:

Payroll: Bridge HRO handles most of your company’s benefits including medical, dental, and vision insurance as well as handling retirements and other claims. We only charge a low monthly fee to handle these benefits and we also allow clients to handle their own benefits via our system without any hidden additional costs.

PEO: PEOs handle most of the company’s benefits but tend to charge an additional fee for their services.