A PEO sends you two bills in one invoice: a fee for running payroll and HR, and the cost of the benefits your team is on. Most articles about PEO cost talk about the first. For a startup that offers health insurance, the second is usually the bigger number.
I help small businesses compare PEOs with the other ways to cover a team. Here's how the pricing works and how to compare it.
The admin fee
PEOs charge for payroll, HR and compliance in one of three ways:
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A flat fee per employee per month. This is the most common model for startups.
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A percentage of payroll. TriNet's guide puts this at 2% to 12% of wages, citing PEOcompare.com.
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A mix of the two, such as a flat benefits fee plus a percentage of payroll for tax and admin work.
Justworks is one of the few PEOs that publishes its prices. As of October 15, 2026, its pricing page lists PEO Basic at $79 per employee per month and PEO Plus at $124 per employee per month, with no base fee. Health insurance administration is only in PEO Plus, so a company that wants Justworks' medical plans pays the Plus price.
TriNet and Rippling don't list PEO prices on their sites. You get a quote for your company. For an average, TriNet cites NAPEO, the PEO trade association: $1,395 per employee per year, or about $116 a month.
A flat fee per employee costs a 5 person company the same per person as a 50 person company. Ask whether a PEO has a minimum fee, because a small team can pay it even when its headcount is lower.
The benefits
This is where most of the money goes. KFF's 2025 survey puts the average employer health plan at $9,325 a year for single coverage and $26,993 for family coverage.
Here's what that means for a 10 person team where everyone takes single coverage, using Justworks PEO Plus and the KFF average:
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Admin fee: $124 x 10 employees x 12 months = $14,880 a year.
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Health premiums: $9,325 x 10 = $93,250 a year.
In that example the admin fee is about 14% of the total. A 10% change in the health premiums moves your cost more than a 60% change in the admin fee.
PEO health plans are priced for the PEO's whole pool of companies, not for your team alone. That can help a small or older team, and it can cost a young, healthy team more than a plan priced on its own group. The only way to know is to price both.
The other line items
Ask for each of these in writing:
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Workers' comp. Justworks lists it as required on its PEO plans. Ask for the rate for each of your job classes.
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State unemployment tax. A PEO can file under its own state rate instead of yours. Ask which rate applies to you, and what it is.
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Setup fees. Some PEOs charge one, and some don't. Justworks says it doesn't.
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Exit terms. Ask how much notice you have to give and whether you'd owe a fee to leave. Your benefits renewal and your notice date should line up, or you can get stuck for another year.
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Add-ons. Time tracking, contractor payments and HR consulting are often extra.
How to compare PEOs
Put every quote on the same line:
Total yearly cost = admin fee x employees x 12 + the employer's share of premiums + workers' comp + state unemployment tax + add-ons
Then compare with what you'd pay without a PEO. A small business can also buy a small group health plan, a level funded plan or an ICHRA, and run payroll on separate software for much less per employee. Justworks' own payroll plan is $8 per employee per month plus a $50 base fee. Sometimes the PEO is still the best choice, and sometimes it isn't. It depends on your team's ages and locations and which doctors they need.
Get a comparison
Decent compares PEOs, small group plans, level funded plans and ICHRAs for the same team, on the same terms, and tells you which one we'd pick. The PEO or insurance company you choose pays us, so you don't pay a fee. Before you sign, we tell you in writing what we'll be paid, and if you ask, we'll tell you what we'd earn on every other option we showed you.
You can price standard plans right away at decent.com/quote, or book 15 minutes with me.
Nick