Best PEO Companies for Small Business

What is a PEO and How Does It Work?

If you've been running a small business, you already know that wearing multiple hats is just part of the deal. But what if you could hand off the HR, payroll, compliance, and benefits without hiring a full in-house team? That’s where a PEO—Professional Employer Organization—comes in.

A PEO is a company that enters into a co-employment relationship with your business. In simple terms, it legally becomes the employer of record for tax and HR purposes, while you retain full control over your employees' day-to-day work and business decisions. It sounds complicated, but it’s not. Think of it like outsourcing the most time-consuming, detail-heavy parts of your business—HR, payroll, compliance, employee benefits, risk management—so you can get back to growing your company.

Here’s a real-world analogy: Imagine your small business is a band. You're the lead singer and songwriter, but managing logistics like travel, contracts, and payments is eating up your creative time. A PEO is like a tour manager who handles the behind-the-scenes work so you can focus on rocking the stage.

PEOs use economies of scale to offer better insurance, more robust benefits, and up-to-date compliance systems than most small businesses can manage on their own. And it's not just about saving time. With laws constantly changing, especially around employment, health care, and taxation, partnering with a PEO helps you stay compliant and out of trouble.

In short, PEOs exist to let small businesses function like large ones—without the massive overhead.

Benefits of Using a PEO for Small Businesses

So why do small businesses, especially those with under 100 employees, love PEOs? Because they’re a game-changer.

Here are the key benefits that small business owners consistently report when using a PEO:

Time Savings: Admin tasks like running payroll, handling tax filings, tracking benefits, and updating HR policies can eat up 10–20 hours a week. A PEO takes that off your plate.
Cost Efficiency: PEOs offer group rates on healthcare, workers' compensation, and benefits. That means small businesses can offer competitive packages without breaking the bank.
Compliance Assurance: Whether it’s local, state, or federal laws (hello, IRS and Department of Labor), a PEO keeps you compliant. No more guessing about changes in employment law.
Talent Retention and Recruitment: Offering good benefits helps attract top talent. PEOs let you offer big-company perks—like 401(k) plans, dental and vision insurance, and more—even if you're a team of 5.
Risk Reduction: PEOs manage liability, reduce exposure to lawsuits, and provide support if you're ever audited.

A study by the National Association of Professional Employer Organizations (NAPEO) found that businesses that use PEOs grow 7-9% faster, are 50% less likely to go out of business, and see 10-14% lower employee turnover.

Bottom line: for small business owners looking to grow sustainably while staying lean, a PEO isn’t just a luxury—it can be a strategic necessity.

How to Choose the Right PEO for Your Small Business

Key Features to Look for in a PEO Provider

Not all PEOs are created equal. Some are nationwide giants with slick dashboards, while others are boutique firms with personalized service. So how do you pick the right one for your business?

Here’s a checklist of must-have features:

HR and Payroll Automation: Make sure they offer intuitive software for payroll, employee onboarding, PTO tracking, and tax documentation.
Robust Employee Benefits: Look for access to health, dental, vision, life insurance, 401(k), and wellness perks. The more options your employees have, the better.
Scalability: Your PEO should grow with you. Whether you’re hiring your first or fiftieth employee, the PEO should be flexible.
Dedicated Support: Do they offer a dedicated account manager or a rotating support team? Will you be calling a helpdesk or speaking to someone who knows your business?
Transparent Pricing: Some charge per employee, others take a percentage of payroll. Know exactly what you're paying for and watch for hidden fees.
Compliance Expertise: Make sure they handle federal, state, and local labor law compliance, including tax filing, workers’ compensation, unemployment insurance, and OSHA regulations.
Reputation and Reviews: Check third-party reviews, Better Business Bureau ratings, and client testimonials.
Certifications: Look for IRS-certified or ESAC-accredited PEOs—they’re held to higher standards of financial transparency and client protection.

Choosing the wrong PEO can result in wasted money, compliance issues, or employee dissatisfaction. But get the right one, and it’s like plugging your business into a full-stack HR machine.

Common Pitfalls to Avoid

Let’s be real—some PEO partnerships can feel more like a handcuff than a helping hand. To avoid costly mistakes, watch out for these common pitfalls:

Signing Long-Term Contracts Without a Trial: Always ask for a short-term agreement or trial period before committing.
Underestimating the Total Cost: Be wary of low monthly base fees that skyrocket with add-ons. Ask for full cost transparency, including benefits markups.
Ignoring Integration Capabilities: If the PEO's systems don’t sync with your existing tools (like QuickBooks or your ATS), you’re in for a headache.
Poor Customer Service: Slow response times, outsourced support, or vague answers are red flags. Don’t underestimate the importance of real-time, human help.
Inflexibility: Some PEOs only work well in certain industries or with certain company sizes. Make sure they’ve got experience in your niche.

Avoid these traps, and your PEO experience will be a power-up—not a pain point.

Top 10 Best PEO Companies for Small Businesses in 2025

1. ADP TotalSource

ADP is a household name in payroll and HR, but many small business owners don’t realize that ADP also offers a full-service PEO called ADP TotalSource. It’s one of the largest and most trusted PEOs in the country.

What makes ADP TotalSource standout? First, it’s IRS-certified and ESAC-accredited, which means it meets the highest standards for financial practices and compliance. Second, ADP’s technology is some of the best in the industry. Their dashboard makes it easy to manage payroll, benefits, onboarding, and more—all from a single portal.

ADP TotalSource also offers access to Fortune 500-level employee benefits, including health, dental, vision, life insurance, and retirement plans. For small businesses that want to compete with larger companies for talent, that’s a game-changer.

Their HR support is excellent, with dedicated specialists to help you stay compliant with state and federal regulations. Whether it’s FMLA, ACA, or local tax laws, they’ve got you covered.

However, all these bells and whistles come at a cost. ADP is known to be on the pricier side, and their pricing model isn’t always transparent. You’ll need to request a custom quote based on your team size and location.

Still, if you're looking for an enterprise-level solution tailored for small businesses, ADP TotalSource is a top-tier choice.

2. Justworks

If you want a PEO with a modern user interface, transparent pricing, and startup-friendly features, Justworks is the way to go.

Founded in 2012, Justworks has quickly become a favorite among small teams and fast-growing startups. Their simple pricing structure—a flat monthly fee per employee—makes budgeting easy. No confusing percentages or hidden charges.

What sets Justworks apart is its clean, user-friendly dashboard. It’s super easy for employees to enroll in benefits, manage time off, and view their pay stubs. The entire experience feels modern and intuitive.

Despite its simplicity, Justworks doesn’t skimp on features. You’ll get access to great benefits, payroll processing, compliance help, automated tax filings, and real-time support via chat, email, or phone. They also provide HR consulting for sticky situations—like how to handle employee terminations or write up a company handbook.

The one downside? Justworks doesn’t offer as many customization options as larger providers. If you need deeply tailored benefits packages or international employee support, you might outgrow it as your team expands globally.

But for small businesses with 2–100 employees who want affordable, transparent PEO services with a startup vibe, Justworks delivers serious value.

3. Insperity

Insperity is another heavyweight in the PEO space, known for personalized service and long-standing HR expertise. They’ve been in the game for over 30 years and have built a reputation for helping small and midsize businesses navigate the complexities of HR and compliance.

Where Insperity shines is in their hands-on customer support. You’re not just another client on a list—you get a dedicated account manager who actually learns your business and provides tailored advice. For owners who want a relationship-focused partner, this is a huge plus.

They offer a full suite of services: payroll, risk management, employee training, performance reviews, time tracking, benefits administration, and compliance oversight. Their benefits packages are competitive, and they’re especially strong when it comes to employee development tools.

One of their strongest value points is helping small businesses scale. As your company grows, Insperity can pivot with you—offering more advanced services and consulting without switching providers.

On the downside, their tech platform isn’t as sleek or modern as competitors like Justworks or Rippling. And similar to ADP, they tend to be more expensive than startup-oriented solutions.

Still, for business owners who value strong HR guidance and personalized support, Insperity is a rock-solid choice.

4. Paychex PEO

Paychex is a familiar name in payroll processing, but its PEO services go well beyond just cutting checks. Their PEO division is particularly attractive to small and midsize businesses who want to bundle HR, compliance, and employee benefits in one neat package.

With Paychex PEO, you get access to:

Payroll and tax administration
Employee benefits management
Workers’ compensation and liability insurance
Hiring and onboarding tools
Time tracking
Labor law compliance
Real-time reporting dashboards

Paychex integrates with many third-party tools and offers customizable solutions, which is a huge plus for businesses that want flexibility. Their mobile app and online dashboard are easy to use, and their customer support is available 24/7.

What makes them especially unique is their robust benefits administration. Paychex allows you to design your own benefit programs or use theirs, depending on your budget and goals.

The only real downside is that, like ADP, Paychex PEO can be somewhat opaque with pricing. You’ll need to schedule a consultation to get a quote tailored to your company.

For companies that already use Paychex for payroll or want a well-integrated HR system with a long track record, Paychex PEO is a safe and smart option.

5. TriNet

TriNet caters to small and medium-sized businesses, with a particular strength in industry-specific HR solutions. If you're in healthcare, financial services, tech, or even nonprofits, TriNet offers tailored PEO packages that align with your unique compliance and benefits needs.

One of TriNet's biggest differentiators is their benefit offerings. Thanks to their buying power, you can access premium insurance plans that might otherwise be out of reach for a small business. They partner with top-tier providers like Aetna, MetLife, and Kaiser Permanente.

Their platform is intuitive, with tools for payroll, employee onboarding, benefits enrollment, and expense tracking. They also offer compliance assistance, risk mitigation, and access to HR professionals when you need guidance.

Another standout feature is their reporting and analytics dashboard. TriNet provides valuable insights into labor costs, employee performance, and hiring trends—making it easier to make data-driven decisions.

What’s the catch? TriNet’s pricing isn’t publicly available and tends to be higher than some newer PEOs. Also, their customer support, while knowledgeable, is sometimes reported to be less responsive than competitors.

Still, for growing businesses that want a customizable, industry-specific PEO, TriNet is among the top players in 2025.

6. Rippling PEO

Rippling has quickly become one of the most disruptive forces in the PEO and HR tech space—and for good reason. Unlike traditional PEOs that often operate on clunky legacy systems, Rippling has built a modern, fully integrated HR and IT platform that scales beautifully with small businesses and startups.

What truly sets Rippling apart is its all-in-one approach. You can manage everything from payroll and benefits to device management, app access, and employee onboarding all in one dashboard. That’s right—they’ll even ship a new hire their laptop and provision access to Slack, Zoom, and other tools on Day One. This makes it a fantastic choice for remote-first or distributed teams.

Their PEO model includes:

Payroll automation with tax filings
Health, dental, vision, and life insurance
Workers’ comp and liability insurance
Time tracking and PTO management
Advanced reporting and analytics
Legal compliance at the local, state, and federal levels

Rippling also gives you the flexibility to switch from their PEO model to their standard HRIS platform anytime, meaning you’re not locked in if your business changes direction. This is especially valuable for scaling companies who anticipate needing more control over HR down the road.

Their pricing is transparent and modular, meaning you only pay for the features you use. Support is solid, the interface is sleek, and setup is quick.

If you're a tech-savvy business looking for a modern solution with room to grow, Rippling offers unmatched value in the PEO space.

7. Oasis Outsourcing

Oasis, now a Paychex company, is a full-service PEO that’s been in business for over two decades. It's tailored to small and mid-sized businesses and has carved out a niche for itself with industry-specific solutions in sectors like hospitality, healthcare, retail, and education.

What’s impressive about Oasis is its hands-on approach. From the moment you sign up, you’re matched with a dedicated team that gets to know your business inside and out. They handle payroll, benefits administration, onboarding, compliance, and risk management—all under one roof.

Oasis also stands out for its training and development resources. They provide a suite of employee learning tools, performance tracking systems, and even help with career pathing and development planning. That’s a rare feature for most PEOs, especially at this price point.

The benefit packages are also quite strong, offering group health insurance, dental, vision, and 401(k) plans through major carriers. The PEO also helps with unemployment claims management, worker’s compensation, and return-to-work programs.

However, Oasis doesn’t always provide the same level of tech polish that modern platforms like Rippling or Justworks offer. The user interface is functional but can feel dated.

Still, for business owners who want dedicated support and robust training programs, Oasis offers a very complete and supportive PEO experience.

8. Amplify PEO

Amplify PEO is a lesser-known name compared to the giants, but it’s making waves in the industry by focusing on personalized service and transparent pricing. They specifically target small businesses and pride themselves on custom-tailored solutions that fit each business like a glove.

Amplify handles:

HR compliance and risk management
Payroll and tax administration
Time and attendance
Benefits enrollment and management
Employee handbooks and training
Dedicated HR support teams

What business owners love about Amplify is their responsive, boutique-style service. They don’t treat clients as just another number. Each client is assigned a team that understands their business, industry challenges, and growth goals.

Their benefits packages are competitive, and the PEO has partnerships with large insurance carriers that help small companies access better plans without high premiums. Amplify also has a strong compliance backbone, helping ensure you're covered from labor law changes to ACA regulations.

On the downside, they lack the brand recognition and tech integration options of larger players, which might matter to some businesses with complex needs. But if you’re looking for white-glove service with enterprise-level features, Amplify PEO might surprise you.

9. Papaya Global

If your small business has global ambitions or a remote team spread across borders, Papaya Global is worth a serious look. Papaya isn’t a traditional U.S.-based PEO—it’s a global workforce management platform that offers Employer of Record (EOR) and PEO services in over 160 countries.

This makes it the go-to choice for startups and businesses that need to hire international employees compliantly, without setting up legal entities in each country. They handle everything from global payroll and tax compliance to benefits administration and immigration services.

Their platform is sleek and data-driven, providing dashboards with real-time insights into payroll costs, workforce demographics, and country-specific labor laws.

Key features include:

International hiring and onboarding
Global payroll processing
Benefits management in multiple countries
Local tax filing and compliance
Contractor vs employee classification
On-demand global HR support

Of course, if your business is U.S.-only and doesn’t plan to expand globally, Papaya might be overkill. But for globally distributed teams or startups eyeing international markets, Papaya Global provides unmatched global reach with full compliance and ease.

10. CoAdvantage

CoAdvantage is a PEO built with small and medium-sized businesses in mind, offering a balance between tech-powered HR tools and personalized service. With over 90,000 employees under its management, it’s no small player—but it still manages to maintain a client-first feel.

What makes CoAdvantage attractive is its focus on HR strategy and growth. Beyond the basics of payroll and compliance, they also help companies with talent acquisition, workforce planning, and employee development.

Their services include:

Payroll administration and tax filings
Risk management and workplace safety programs
Employee performance tracking
Benefits plan design and management
Hiring and background checks
Training and development support

They also provide detailed HR analytics and reporting, so you can make informed decisions on hiring, retention, and compensation.

CoAdvantage is particularly known for supporting small businesses during scaling phases—when HR needs suddenly become more complex and risky.

If there’s one drawback, it’s that some users report occasional lags in customer service response times. However, when they do respond, the quality of support is high.

In summary, CoAdvantage is a well-rounded, strategic PEO partner for small businesses preparing for growth and looking for stability in their HR operations.

Comparison Table of Top PEO Providers

PEO CompanyBest ForPricing ModelEmployee BenefitsCompliance SupportCustomer ServiceADP TotalSourceLarge teams, comprehensive tools% of payroll (Custom)ExcellentFull-serviceDedicated specialistJustworksStartups, tech-savvy businessesFlat monthly rateGreatAutomated + HR team24/7 supportInsperityPersonalized HR supportCustom QuoteRobustExtensiveDedicated managerPaychex PEOAll-in-one platformCustom QuoteExcellentFull-service24/7 supportTriNetIndustry-specific needsCustom QuoteExcellentStrongMixed reviewsRippling PEOModern UI, flexibilityModular pricingGoodFull complianceGreat supportOasis OutsourcingHands-on service, training toolsCustom QuoteCompetitiveReliableIndustry focusedAmplify PEOBoutique service, transparencyTransparent pricingStrongFull complianceVery responsivePapaya GlobalGlobal hiring and payrollBased on locationGlobal optionsCross-borderMultilingual supportCoAdvantageGrowing small businessesCustom QuoteVery goodComprehensiveStrategic support

Industry-Specific PEO Recommendations

Best for Tech Startups

Tech startups have unique needs: fast hiring cycles, flexible work environments, and often remote-first teams. That’s why Rippling and Justworks stand out for startups.

Rippling is the ideal choice for tech companies that want seamless onboarding, remote device management, and app provisioning all from one dashboard. Plus, its modular pricing model means you can scale features up or down as you grow.

Justworks is perfect for early-stage startups looking for a flat-fee, easy-to-use PEO. Its intuitive interface, transparent pricing, and top-tier benefits make it a favorite among small, agile teams.

Both platforms provide quick implementation, excellent documentation, and developer-friendly integrations—must-haves for modern tech businesses.

Best for Retail & Hospitality

Retail and hospitality businesses often deal with high turnover, hourly workers, and complex scheduling. For them, Oasis Outsourcing and CoAdvantage are excellent choices.

Oasis has deep experience in service industries and offers customized HR packages for hospitality, retail, and franchises. Their training tools and compliance support help manage seasonal fluctuations and risk.

CoAdvantage supports performance tracking and timekeeping systems, which are crucial in retail environments. Their tools streamline hiring, onboarding, and workforce planning so you can focus on serving customers, not juggling HR paperwork.

Best for Remote Teams

Managing a global or fully remote team? Papaya Global is your best bet.

With its Employer of Record services in 160+ countries, Papaya helps businesses stay compliant with international labor laws, payroll taxes, and benefits regulations—all through a sleek, centralized platform.

If you’re more focused on a U.S.-based remote team, Rippling is again a winner, offering cloud-based onboarding, remote IT setup, and device management that fits the remote lifestyle perfectly.

The Cost of PEO Services

Average Pricing Models

PEOs use different pricing models, and costs vary depending on your company size, location, industry, and services required. The two most common pricing structures are:

Per Employee Per Month (PEPM): Typically ranges from $50 to $200 per employee. Justworks and Rippling use this model.
Percentage of Payroll: Ranges from 2% to 12% of your total payroll. ADP and Paychex often use this structure.

The average small business with 10 employees might expect to pay $1,000–$2,500/month, depending on features.

Hidden Fees to Watch For

Some PEOs are not upfront about all costs. Here are the common hidden fees to watch:

Setup or onboarding fees
Benefit markup percentages
Early termination fees
Minimum headcount requirements
State-specific compliance surcharges

Always request a detailed proposal with full pricing transparency before signing a contract. And if a provider is reluctant to share numbers? That's a red flag.

Legal & Compliance Benefits of Partnering with a PEO

Compliance isn’t just a buzzword—it’s a lifeline for small businesses. Employment law is complex and ever-changing, and one mistake could lead to lawsuits or IRS penalties. That’s where PEOs shine.

Partnering with a PEO gives your business access to:

Employment law expertise for federal, state, and local regulations
Tax compliance and filings, including 940/941, W-2s, 1099s, and more
Wage and hour law support (think overtime and exempt classifications)
Safety and OSHA compliance training
Employee handbooks and workplace policies tailored to your business

Many PEOs also offer workers’ comp insurance, EEOC and ADA compliance guidance, and risk management services—especially valuable in industries prone to injury or high turnover.

With a PEO on your side, you significantly reduce the risk of non-compliance, lawsuits, or government audits—giving you peace of mind while you grow your business.

Real-Life Case Studies

Success Stories from Small Businesses Using PEOs

Case Study 1: Tech Startup Scales from 3 to 50 Employees with Justworks

A SaaS company in San Francisco used Justworks to manage its HR from day one. Within two years, they grew from 3 employees to 50 across four states. Thanks to Justworks, they offered competitive benefits, stayed compliant with multi-state tax laws, and reduced onboarding time by 70%.

Case Study 2: Local Retailer Saves 25% on Benefits with ADP TotalSource

A family-owned retail chain with 20 employees in Florida switched from in-house HR to ADP. They saved 25% on healthcare premiums through ADP’s group buying power and avoided penalties during a Department of Labor audit, thanks to ADP’s compliance support.

Case Study 3: Global Remote Agency Expands into 10 Countries with Papaya Global

An agency with remote contractors used Papaya Global to legally hire full-time staff in countries where they had no legal entity. Papaya managed payroll, tax, and benefits while ensuring total compliance with local employment laws—unlocking global expansion.

Pros and Cons of Using a PEO

ProsConsAccess to enterprise-level benefitsCan be expensive for very small teamsReduced legal and compliance risksSome PEOs have long-term contractsStreamlined payroll and HR administrationLoss of some control over HR processesExpert HR support and consultingMay not be industry-specificScalability and flexibilitySwitching PEOs can be complex

Overall, the pros far outweigh the cons—especially for small businesses without a dedicated HR department.

Alternatives to PEOs for Small Businesses

Not ready for a full-service PEO? Here are a few alternatives:

HR software (like Gusto, BambooHR, or Zenefits): Offers tools for payroll, onboarding, and benefits without co-employment.
HR consultants: Hire freelance HR experts for short-term or part-time help.
In-house HR staff: More control but higher long-term costs.
Administrative Services Organizations (ASOs): Similar to PEOs but without co-employment, offering flexibility.

Each option has its pros and cons, but if you need comprehensive HR, compliance, and benefits management, a PEO remains the most efficient, scalable solution for small businesses.

Conclusion

Choosing the best PEO for your small business is one of the most impactful decisions you'll make. The right PEO acts like a growth partner—handling payroll, benefits, compliance, and HR headaches while you focus on what really matters: running and growing your business.

Whether you’re a tech startup building remote teams, a local retailer managing seasonal staff, or a business looking to expand globally, there's a PEO tailored to your needs. From the enterprise power of ADP TotalSource, to the sleek modernity of Rippling, to the international expertise of Papaya Global, your options are richer and more customizable than ever before.

Take your time, compare the features, ask the tough questions—and choose a partner that aligns with your goals, culture, and budget.

FAQs

What is the difference between a PEO and an HR outsourcing service?

A PEO offers a co-employment model and typically handles benefits, payroll, compliance, and risk management. HR outsourcing may provide some of these services but without the legal co-employment relationship.

Can a small business afford a PEO?

Yes! Many PEOs offer pricing plans that start as low as $50–$100 per employee per month. And the ROI often justifies the cost by saving time, reducing risk, and improving employee retention.

Are PEOs only for U.S.-based companies?

No. Companies like Papaya Global provide PEO and Employer of Record services internationally, helping you legally employ workers in other countries.

How quickly can a business onboard with a PEO?

Onboarding typically takes 1 to 4 weeks, depending on the provider and how complex your organization is. Some services, like Justworks and Rippling, offer near-instant onboarding.

What happens if you want to leave a PEO?

You can exit a PEO agreement, but the process may involve transition fees, changes in benefits coverage, and re-establishing your employer tax ID. It's best to clarify exit terms in your contract upfront.