How to Compare PEO Proposals: An Apples-to-Apples Guide

You’ve talked to a few PEO providers and now you’re looking at three or four proposals that all use different formats, different pricing models, and different bundling structures. Comparing them feels like comparing cell phone plans — everything is designed to make direct comparison difficult. That’s not an accident.

Here’s how to normalize PEO proposals so you can actually see what you’re paying for and make a clear decision.

Step 1: Separate Admin Fees from Pass-Throughs

Every PEO proposal includes costs that exist whether you use a PEO or not: payroll taxes, workers’ comp premiums, and health insurance premiums. These are pass-through costs. The PEO is collecting them on your behalf, but they’re not the PEO’s fee. The admin fee — sometimes called the service fee or management fee — is what you’re paying for the PEO’s actual service. That’s the number you need to isolate for each proposal.

Some providers make this easy by listing the admin fee separately. Others bundle everything into a single percentage of payroll, making it almost impossible to see the breakdown. If a PEO won’t unbundle their pricing when you ask, that’s a red flag.

Step 2: Normalize the Workers’ Comp Component

Workers’ comp is where most of the pricing variation lives. One PEO might quote you a blended rate per $100 of payroll. Another might show a class-code-specific rate. A third might wrap it into a bundled percentage. To compare, you need to calculate the total annual workers’ comp cost under each proposal using your actual payroll figures and class code breakdown.

Don’t forget to check whether the quote includes pay-as-you-go or requires an upfront deposit. A lower rate with a $50,000 deposit is a very different proposition than a slightly higher rate with no deposit at all.

Step 3: Compare Benefits Plans Head-to-Head

PEOs use different insurance carriers, different plan designs, and different contribution structures. The quote that shows the lowest overall cost might have a health plan with $6,000 deductibles, while the more expensive quote includes a plan your employees will actually use. Compare deductibles, out-of-pocket maximums, copays, network size, and which carriers are offered. If the PEO won’t provide plan details before you sign, that’s another red flag.

Step 4: Look at What’s Missing

The items that aren’t in the proposal are often the most expensive surprises. Does the PEO include EPLI? What about COBRA administration? 401(k)? HR hotline? Is there a setup fee? Implementation fee? Early termination fee? I’ve seen proposals that looked like the best deal on paper until you factored in $15,000 in fees that weren’t mentioned in the initial quote. Read the fine print on PEO proposals — it matters.

Or, Let Someone Do This for You

This comparison process is exactly what I do for every client. I collect proposals from the PEOs that are the best fit for your business, normalize the pricing into a single apples-to-apples format, and walk you through the differences so you can make a clear, informed decision. It costs you nothing, and it replaces the weeks you’d spend trying to decode proposals on your own.

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Staring at PEO proposals and not sure what you’re looking at?

Send them to me. I’ll do the comparison and give you a straight answer on which one is actually the best deal.