By Cesar Figueroa, Owner, ReUp Benefits · Licensed health insurance and PEO broker
In this guide
What are average PEO fees for small businesses? Most small businesses pay a PEO administrative fee of $80 to $200 per employee per month. Bare-bones service runs about $80 to $100, a typical mid-tier package $100 to $140, and high-touch service with extra modules $150 to $200. Taxes and insurance premiums are billed on top.
Those are the ranges I see in real quotes after more than ten years inside three PEOs. Published industry ranges run wider, and the spread comes down to one thing: what you're actually buying. This post breaks down what the fee covers and what pushes it up or down. For the full picture of how PEOs price, including the margins outside the admin fee, start with our PEO pricing guide.
What are PEO fees?
A PEO invoice has two kinds of charges. Pass-through costs are your employees' wages, employer payroll taxes, workers' comp and insurance premiums. The PEO fee, usually called the administrative fee, is what you pay the PEO for running all of it.
The admin fee is charged one of two ways: a flat amount per employee per month (PEPM), or a percentage of payroll. ADP puts the industry range at about $40 to $160 per employee per month, or 2% to 12% of payroll (2026). This post uses PEPM, because it's the easiest way to compare. Our pillar guide covers how the two pricing models compare. The admin fee is only one place a PEO earns, which we cover in how a PEO makes money.
What is included in PEO administrative fees?
Almost every PEO admin fee covers the core: payroll processing, payroll tax filing, benefits administration, basic HR support and compliance help. Beyond that, packages differ a lot.
| Usually included | Often an add-on or a higher tier |
|---|---|
| Payroll and payroll tax filing | Applicant tracking and recruiting tools |
| Benefits administration and enrollment | Performance management |
| Basic HR support by phone, chat or email | A dedicated HR business partner |
| Employee self-service portal | On-site HR support and on-site audits |
| Handbook templates and compliance alerts | Learning management and training |
| Workers' comp claims handling | Time tracking and scheduling |
Published plans show the split. Justworks lists its PEO at $79 per employee per month for Basic and $124 for Plus, which adds medical, dental and vision administration. Dedicated HR consulting is another $30 per employee per month, and time tracking is $8 (as of October 2026).
What are average PEO fees for small businesses?
Here's how admin fees break down by service level in the quotes I see for small businesses:
| Service level | Admin fee (PEPM) | What you typically get |
|---|---|---|
| Bare-bones | $80 to $100 | Payroll, benefits administration, a shared support team, basic technology |
| Mid-tier | $100 to $140 | The core plus a named account contact, better reporting and some add-on modules |
| High-touch | $150 to $200 | A dedicated HR partner, on-site support or audits, and a full technology suite |
Outside data lines up with the middle of that range. People Managing People puts the average at about $100 to $120 per employee per month (2026). EORHQ's 2026 cost guide puts a 10-person company at $60 to $140 per employee per month, with rates dropping as headcount grows. The lowest published rates usually mean a narrow package, so check what's left out before you compare.
What makes PEO fees higher or lower?
Three things drive most of the difference between a $90 quote and a $190 quote.
How high-touch the service is
A shared support queue costs less than a named HR business partner who knows your company. At the top end, some PEOs send people on site for HR support, safety reviews or compliance audits. That's real labor, and it shows up in the fee.
How much technology you get
Some PEOs run on a bare-bones payroll and benefits platform. Others include a full HR system with reporting, onboarding workflows and integrations. A stronger platform costs more, but it can replace software you'd otherwise buy separately.
Which modules you add
Applicant tracking, performance management, learning management and time tracking are often sold as modules. Each one adds a few dollars per employee, and they stack. A $100 base fee can turn into $140 once you add three.
Headcount, industry and the states you hire in matter too. Larger groups usually get a lower rate per employee, and a riskier workforce or a multi-state footprint can push it up.
How much will a PEO cost per year?
Multiply the fee by headcount and by 12. For a 20-person company:
- Bare-bones: $19,200 to $24,000 a year
- Mid-tier: $24,000 to $33,600 a year
- High-touch: $36,000 to $48,000 a year
Then add any one-time setup fee. EORHQ puts those at $500 to $2,500, sometimes waived for larger clients. And remember the admin fee isn't the only place a PEO earns money. State unemployment tax, workers' comp and health premiums can carry margin too, which our guide covers under how PEOs make money.
The right fee is the one that matches what you'll use. Paying $180 for on-site support you never call on is as much a mistake as paying $85 for a service that leaves you without help when you need it. Get quotes at the same service level, ask for every module itemized, and compare the total. A PEO broker can do that side by side for you. If you are also weighing an HR outsourcing company that does not co-employ, see our guide to ASO vs PEO for how the fees compare.
Frequently asked questions about PEO fees
Are PEO fees negotiable?
Yes. The admin fee is the most negotiable part of a PEO quote, especially with competing quotes in hand. Setup fees, minimums and module pricing can move too. Our guide to PEO discounts covers free months, fee discounts and the other levers you can ask for.
Is the admin fee the total cost of a PEO?
No. You also pay wages, employer taxes, workers' comp and insurance premiums through the PEO. The admin fee is the PEO's charge for running them.
Do PEOs charge less per employee as you grow?
Usually. Per-employee rates tend to drop as headcount rises, so ask whether your rate steps down at set headcount levels.
Want to know if your PEO fee fits your service level? Book a 20-minute review with me. Bring your current invoice or proposal.
Sources
This article is general information, not legal, tax or insurance advice. Fee ranges reflect quotes I've seen and the public sources below, as of October 2026. Your quote will depend on your headcount, industry, states and service level.
- ADP: What is the cost of a PEO? (2026)
- People Managing People: Cost of PEO services (2026)
- EORHQ: PEO cost guide (2026)
- Justworks: Pricing