PEO EXPLAINED
What Is a PEO?
A professional employer organization (PEO) can help an employer administer payroll and other agreed employment functions through a co-employment relationship. The employer continues to run its business and manage employees’ day-to-day work.
PEO, EOR, and ASO: a clear high-level view
| Model | Employment relationship | Client role | Typical scope |
|---|---|---|---|
| PEO | Co-employment for agreed employment functions | Client manages day-to-day work and business decisions | Payroll and other agreed HR, benefits, risk, or workers’ compensation administration |
| EOR | EOR is generally the legal employer under the arrangement | Client directs the assignment within the arrangement | Employment, onboarding, payroll, and compliance support |
| ASO | Client generally remains employer of record | Client manages its workforce and business decisions | Selected administrative services, often including payroll and HR support |
Explore PEO comparisons
PEO vs. EOR
A PEO uses a co-employment model, while an EOR is generally the legal employer under the arrangement. The right structure depends on the workforce and jurisdiction.
PEO vs. ASO
An ASO provides selected administrative support; the client generally remains employer of record. A PEO arrangement involves co-employment for agreed functions.
PEO vs. HRO
HRO can cover a defined set of HR tasks. A PEO is a more specific co-employment relationship that may combine employment administration services under one agreement.
PEO vs. staffing
A staffing company typically supplies or places workers. A PEO supports an existing employer’s workforce and does not replace day-to-day management.
PEO vs. payroll company
A payroll company generally focuses on payroll processing and related tax administration. A PEO relationship may include payroll plus a broader set of agreed employment-administration services.
This is general educational information, not legal, tax, or insurance advice.
Sources and references
Reference material from industry and provider websites. Confirm current services and terms directly with the relevant provider.