Best PEO for Small Businesses

Small business PEO provider reviews

We sifted through about a dozen of the best PEO companies for small businesses and focused on the ones that offered key HR features like payroll management, applicant tracking, employee onboarding, tax compliance, and time-off tracking. We also looked for transparent pricing, easy access to customer service, and positive online reviews. You can find out more about our selection criteria in the methodology section.

Rippling: Best PEO for Startups

Rippling is an all-in-one HR platform for handling payroll, employee benefits, expenses, and everything else that comes from expanding your team in a hurry.

It offers an “HR Cloud” service but is expandable to other offerings like its Finance Cloud and IT Cloud for businesses that are experiencing fast growth.

Rippling’s ability to grow with your business, along with its user-friendly interface and highly-rated customer support team, is why we rated it the best PEO for startups.

Get Started Visit Rippling’s website.

Rippling features:

• Payroll management: HR tracking includes job codes and multiple pay rate options, and time-off and PTO tracking.
• Tax compliance: Offers Federal, State & Local Tax Filing (W2, W4, 1099, etc.) and a dashboard that lets you review all necessary tax reporting requirements in your startup.
• Vacation/leave tracking: Included in its offering is detailed vacation and PTO tracking, which creates a calendar with an easy-view dashboard to see how many employees will be there on which day.

What markets does Rippling serve?

Rippling isn’t exclusively for startups, but the features neatly line up with a company that’s still got that new-business smell. You can handle all tax compliance requirements and new employee issues like training and PTO.

Read our full Rippling Review.

Justworks – Best for Expanding Employee Benefits

Justworks is simple, straightforward HR and PEO services for companies who want to offer employees a generous benefits package of health and dental insurance and retirement savings plans.

That world can feel complicated for small businesses that have fewer than 100 employees—but Justworks lives up to its name with flat, sensible pricing and intuitive navigation tools for employees and companies alike.

Justworks’s claim to fame is how well it syncs with employee benefits like health insurance, dental, fitness centers, and the like. There is a trigger at 50 employees that lowers the per-employee price by $10/month, which is great for companies who are exiting that “startup” stage and need to become more of a medium-sized business with a variety of employee payment types, like salaried and hourly.

Get Started Visit Justworks’ website.

Justworks features:

• Payroll management: Includes payroll management for both salaried and hourly employees, which is important for companies with a variety of workers.
• Employee onboarding: The Justworks mobile app for employees makes it easy to onboard and handle issues like requesting PTO without having to log in from a desktop computer.
• Vacation/leave tracking: Though some users had problems with PTO balances not showing up, the vacation and leave tracking can be streamlined through the app.

What markets does Justworks serve?

Justworks specializes in agencies, professional services, and tech. And though they serve companies as small as a few employees, they also handle companies with 100 or more. This makes them versatile enough for larger companies but also an ideal fit for companies that are growing and just starting to expand their benefits offerings.

Read our full Justworks Review.

Paychex – Best for Very Small & Growing Businesses

Paychex is great at removing the guesswork that comes with HR, payroll, and employee benefits. In fact, if you’re self-employed and thinking about adding your first employees, it may be the best option for moving from one employee (yourself) to employee number two.

It’s one of the few PEO companies that will work with fewer than 5 employees, which is important for small businesses and startups just getting off the ground. It offers Fortune 500-level benefits such as medical, vision, dental, and 401(k) retirement plans as well as discount programs employees can utilize in the retail, travel, and business services industries.

It also impresses users. One Assistant Director of Talent Acquisition that we spoke to told us “I like the convenience of using Paychex. It was very easy to learn how to use it and it is easy to train new employees on. I also appreciate the customer service. I have a dedicated person I work with at Paychex and she is always available for any questions that I have. Overall, it suits our business needs, is very user friendly, and provides strong customer support when needed.”

Get Started Visit Paychex’s website.

Paychex features:

• Payroll management: The paperwork gets overwhelming in a hurry, which is why people enjoy Paychex’s low-paperwork payroll management.
• Applicant tracking: Includes features for interviewing, sorting, and organizing your employee hires, including handling video conferencing needs.
• Employee onboarding: You can create custom employee onboarding milestones to help your new hires get up to speed quickly.
• Vacation/leave tracking: Also includes an effective scheduling calendar so you can view everything relevant about your employees that day, including birthdays.

What markets does Paychex serve?

Paychex offers a wide range of small business options, but we think its 1-19 employee features make the most sense. Everything is simple here for the first-time business owner, so you’ll likely find that if you make Paychex your first PEO solution, it will be a decision that saves you a lot of headaches.

Papaya Global – Best for Global Employees

Papaya Global is great for large teams across the globe who already have HR systems in place but want to get organized.

Papaya offers an “operating system” that’s great for CFOs of large companies who need to take control of their workforce spending and see what’s really coming out of their payroll. For example, Papaya offers HR benefits comparisons with competitors, giving you a bird’s-eye view of whether your HR systems are up to par with your industry.

Get Started Visit Papaya Global’s website.

Papaya Global features:

• Payroll management: The best feature here was how easy the interface is for enacting payroll changes for employees across multiple countries.
• Tax compliance: Papaya Global takes local tax issues into consideration, giving you the tax compliance capabilities you need for accurate filing across borders.
• Vacation/leave tracking: Though there wasn’t much of a self-service portal that could make things more convenient for employees, the features include vacation and leave tracking to properly schedule employees.

What markets does Papaya Global serve?

As its name suggests, Papaya Global is primarily a service for growing companies who might be crossing that “small business” barrier into greater things. That’s why it’s a great option for small businesses that want more flexibility with scaling across the globe, particularly with full-time global employees.

Read our full Papaya Global review

Remote – Best for International EOR Services

Remote is an all-in-one HR solution designed for global teams looking to hire internationally without opening new entities in each country. Although it’s not technically a PEO, we included it on our list due to its ability to handle global HR requirements and cross-border concerns that may pop up for startups or small businesses with an international, remote workforce.

As an employer of record (EOR), Remote can provide companies with HR services like payroll, benefits, taxes, stock options, and compliance, but it does not enter a co-employment arrangement like a typical PEO. Its EOR services start at $699 per employee per month when you pay monthly. The per-employee pricing drops to $599 per month if you pay annually.

And while Remote serves as the legal employer in the country where the employee works, it doesn’t have any involvement in the day-to-day management of the employee outside of HR functions like payroll and benefits.

Schedule Demo Visit Remote’s website.

Remote features:

• Payroll management: Remote owns local entities across the globe, allowing it to offer “employer of record” options in a variety of countries for easier payroll management. Also includes U.S.-based 1099 contracting options.
• Employee onboarding: Features a completely self-serve option, which makes Remote grow well with companies that have hundreds of employees or more.
• Vacation/leave tracking: Automatically handles issues for time zones, making its global PTO options a must-have for any company with a lot of remote workers.

What markets does Remote serve?

Nearly any type of company who has a global presence with remote workers will want to consider Remote. Although it can be more expensive to use EOR services, signing up with Remote is one of the most convenient ways to access a compliant global HR system that grows with your company.

Read our full Remote Review.

Compare the best PEO for Small Businesses side-by-side

* Custom pricing “at discount,” according to their sales team, and based on the writer’s location of Wisconsin—keeping in mind that different locations may have different state tax compliance needs.

What is a PEO for small business?

A professional employer organization (PEO) acts as the co-employer of an individual and takes on the responsibility of tax implications, HR, payroll, and benefits while the original company/employer handles the employee’s day-to-day responsibilities. These companies typically offer full-service HR solutions for small businesses that don’t have the resources to build a full-fledged HR department. A PEO will act like an HR department for its clients but isn’t technically part of your company.

Who should use a PEO?

A small business that needs to add employee-friendly services and benefits like health insurance or global payments should consider using a PEO. If taxes and other compliance issues are becoming too complicated, a PEO can simplify the process so you’re free to focus on managing and growing the business. Many PEOs offer employee dashboards that make onboarding and collecting important tax and payroll information easier for new hires.

Benefits of a PEO for small business

The primary benefit small businesses get from working with a PEO is being able to outsource a lot of the headaches that come from tax compliance, employee management, and payroll administration. A PEO can step in and handle much of that. PEO services often overlap with HR software that makes it possible to handle benefits, issues like 1099 reporting, employee paid time off approvals, and just about any other HR service you can imagine.

A PEO can potentially serve as the “employer of record” for employees that live in a location where your business does not own an entity, giving you more capacity to grow, including across borders. However, every situation is different, which is why you’ll want to do your research and choose an option on this list that makes the most sense for where you plan on taking your company.

PEOs can potentially be more expensive; many of the pricing details that companies offer are for bare-minimum offerings, so make sure you know what you’re getting before you agree to sign up with one in particular.

How much does a PEO for a small business cost?

How much you pay for PEO services depends on what you sign up for. For more simplified HR solutions, you can find pricing from Rippling that starts as low as $8/month/user, which is one of the most affordable on the spectrum.

A company like Justworks is available at $59/employee/month, and the price goes down to $49/month if you reach the 50-employee mark.

If you’re looking for the full “employer of record,” for example, you can find $599/employee/month with an option like Remote, which also offers options at $29/contractor/month.

We confirmed these numbers through a recent survey where participants told us they pay roughly $700 to $30,000 per month, which by our math came out to approximately $350 to $100 per month per employee, respectively.

Small Business PEO FAQ

Is PEO good for small businesses?

Yes, but with some caveats. You may not need a full PEO in certain cases, such as if you’re hiring an employee who lives in the same location as your business entity and you don’t plan on offering benefits or 401(k) plans. If you run a global team in a complicated industry, you may find that a PEO is ultimately the best way to simplifiy your HR solutions.

Is it a good idea to have a PEO?

Yes, working with a PEO is a good idea if you have a small business where HR is taking up too much of your time. The more you can outsource here, the better. You will have to pay to add these capabilities to your small business. But ultimately, having a full-service HR solution at your disposal can make your employee experience better, allow you to offer expanded benefits, and overall reduce the headaches that come with tax compliance and payroll management.

What are the disadvantages of a PEO?

To give up those headaches, you will also have to give up some control. For example, outsourcing the “Employer of Record” to Remote means that yes, Remote is the legal employer in countries where you don’t own an entity, but the employee you hire will still work for your company like anyone else on your team.

How many employees do you need for a PEO?

There is no strict limit, as many of the companies on this list are capable of offering HR services for small companies, including Paychex, which offers plans for small businesses with 1-19 employees. For Justworks, there is only a minimum of two employees needed.

How we chose the best PEO companies for small businesses

Comparing PEO options for your small business can get a bit tricky, especially since not all vendors offer the same set of PEO services across the board. For example, Remote’s “employer of record” offerings stand out—that’s why their pricing is so unique on our list. In other cases, options like Papaya Global can offer plenty of HR features, but you will have to get a special quote for its PEO services, which aren’t necessarily included.

With that in mind, we took as many PEO-capable and all-in-one HR solutions as we could find. We whittled it down to a list of about a dozen options. We then explored what we had available to us using a variety of methods:

• Online research, including software review websites and the direct websites and information listed by each company
• Phone call research, particularly when it came to capturing pricing information or feeling out the customer support teams
• Head-to-head comparisons of similar features across different platforms

From there, we were able to gather enough information about each service to place it in its proper context. And that’s where more direct comparisons came in. Using a score of 1 to 5 (poor to excellent) across the following criteria, we built a system where each factor included 25% of the overall score:

• Feature variety. We looked for companies that offer extensive HR services like onboarding and applicant tracking with platforms that are easy for employees to use. Greater feature variety means higher scores in this area.
• Pricing and transparency. We found prices listed all over, but transparency was key. We also weighed the fact that some services (like employer of record services for international teams) are naturally going to be more expensive. For example, Remote’s pricing for EOR services was not necessarily a detriment in its overall score.
• Onboarding and support: These can be tricky for business owners new to HR and PEO software, so we made sure to take into account how easy it is to start with the platform as well as user reviews that mentioned onboarding specifically.
• Brand reputation: A brand’s reputation within the marketplace speaks to its performance with thousands of customers. We took that into account, noting that our own impression of a platform wasn’t the only one that mattered.