Professional Employer Organizations Prices

There are no clear-cut price ranges with HR outsourcing. The fees range greatly between services, as well as within the services. Aspects like number of employees, the options you choose to use, and even geography, will affect your overall cost of using professional employer organizations.

A PEO typically charges 4 percent to 8 percent of each employee's pretax salary per month. The monthly range can be as little as $20 per employee to as much as $200.

A typical package with an online service, including insurance, 401(k) and workers' compensation, costs $75 to $130 per employee per month with an upfront setup fee of about $2,000.

If you think this sounds expensive, do a cost comparison of an outsourcing program you are investigating and the average salary and maintenance of an in-house HR director or staff. You might find significant savings either in money, hassle, or both.

Contracts with HR outsourcing firms will usually run a year. But you should work in a clause in which you can give 30 days' notice to break the contract if you are dissatisfied with the services or don't need the services anymore.