What Is PEO
A Professional Employer Organization (PEO) is a company responsible for helping small to medium-sized businesses with the behind-the-scenes work of having employees. They handle things like Payroll, benefits, HR, and compliance on behalf of much smaller companies.
PEOs essentially become a co-employer with you. They help you manage your team and their benefits. You and the PEO become co-partners in employment.
Small businesses in Houston use PEOs for several reasons, including to reduce their legal and compliance risks and to outsource their administration tasks without giving up control of their business. Think of a PEO as an extension of your team, not a replacement for your management.
Servicios
From processing employee paychecks to Managing W-2s and 1099s and filing federal and local taxes, PEOs are excellent for managing basic tasks that consume hours of your time each month.
Small businesses often have budgetary constraints, limiting benefits for employees. Access to a PEO allows small business owners to access a greater number of benefits and even group health insurance discounts. PEOs also have COBRA Administration along with supplement benefits you can leverage to attract top talent.
They also help small businesses in Houston with creating employee handbooks, onboarding and offboarding support, HR compliance guidance, and conflict resolution and termination.
Workers’ comp coverage and claims handling, OSHA compliance and safety training, and liability reduction support all make hiring a Professional Employer Organization worth partnering with.
Small businesses are limited to outdated technology. PEOs open a new world of high-tech solutions. They help you implement self-service portals for things like payroll, benefits, and time-off. They also provide PTO and timekeeping systems that make sense for your business. Access to an entirely new world of HR tech is at your fingertips when you use a PEO.
How it Works
Texas PEOs work the same as they do in any other state, with a few exceptions. For example, employment laws, workers’ comp, and insurance are slightly different. Let’s take a look.
Workers’ compensation is not a requirement for small businesses to have, but it is risky if you don’t carry it. PEOs help connect you to plans that include workers’ comp to reduce your risk. Texas unemployment taxes are your responsibility, and a PEO can help you navigate those. PEOs also help you register with the Texas Workforce Commission (TWC), handle quarterly filings, and claims administration.
Texas, and Houston in particular, is an extremely competitive market for HVAC, healthcare, and tech. Small businesses benefit from hiring a PEO to manage administration tasks.
While you won’t owe any state tax, you will still be responsible for managing payroll. PEOs help with that and keep you compliant.
Compare PEO-managed health plans to traditional group health insurance. Learn more about group health insurance here.
Why
A PEO broker is an independent advisor who helps you understand if a PEO is right for your business, and compare multiple plan options across several PEO providers. Choose one based on your industry, size of the business, and the risk level and budget you have. Here’s what else you should know about using a PEO broker in Houston instead of going direct.
With more PEOs to choose from, the greater your plan pricing will be. Options = choice. Working with a PEO insurance broker helps you fit your budget and admin nee
PEO brokers know who to call and when. At Primary Care Insurance Solutions, we have access to dedicated reps who prioritize broker-referred clients. We have also negotiated countless deals before, giving us an edge. Our clients enjoy faster underwriting, proposal generation, contract approval, and onboarding timelines.
Going direct might sound enticing, but you simply won’t get the same level of transparency that we bring to your hunt for the perfect PEO. We deliver side-by-side comparisons of over 25 top PEOs, breaking down pricing models, benefit plans, admin fees, technology platforms, and contract terms.
Fiduciary support means the PEO takes on key legal and administrative responsibilities, like payroll tax filing, benefits compliance, and 401(k) oversight, reducing your risk and liability. PCIS helps you choose a PEO that clearly outlines and honors these responsibilities, so you’re protected and fully compliant without carrying the burden alone.
When you’re evaluating your outsourced HR solutions, one of the biggest questions is: Should I choose a PEO or an ASO (Administrative Services Organization)? While both models offer valuable support, they differ greatly in structure, legal responsibility, and long-term flexibility. Understanding those differences is key to choosing the right fit for your business in Texas.
Translation: PEOs take on more legal and compliance risk than an ASO.
PEOs often bundle services and offer buying power for benefits (like health insurance), but pricing can be less transparent if not itemized (which is where PCIS can help!). ASOs have lower admin fees, but you could pay more.
The trade off between cost control and compliance protection is one of the biggest decision factors for business owners in Houston and Texas.
How it Works
Working with a PEO for small business reduces health and benefits costs while maintaining a competitive edge in Houston’s tough business market. But how do you find the right PEO companies for your business? Consider the following.
Is the PEO’s plan design flexible or set in stone? Seguro de salud colectivo varies greatly, especially in Texas. Search for a PEO that offers customizable plan options to avoid overspending on benefits you simply do not need.
Does the PEO have access to both national and regional networks? The more carriers are available, the better the experience will be for you.
Can you easily navigate your benefits packages through their HR platform? Do they use tech that makes sense for business? Consider these factors before hiring any PEO.
Some PEO insurance assistance companies hide the true cost of their services. Look for a PEO organization that offers a transparent admin fee structure. Some common red flags include locked-in benefit plans, no opt-outs, or non-itemized quotes. Get all fees in writing and double check that there are no hidden costs before you hire a PEO.
As a PEO broker in Houston, we do the heavy lifting for you and compare PEOs with what you need from them. Whether you’re looking for intuitive platforms for tracking, help with payroll, or plan design flexibility, a broker can help.
Find out how we can help you find the right PEO by scheduling a consultation with us.
Accent Heading
PEO fees differ greatly, but in most cases PEOs charge based on your number of employees and the services you need. Most experts estimate you’re fees will be up to12% of wages. Even still, if you calculate the time you spend on HR and admin tasks, your savings with a PEO could add up to about triple that. But what does that get you? What’s included in PEO pricing?
PEO fees cover the following services:
Most PEOs follow two pricing models:
Cost
The cost of working with a PEO can greatly vary based on the size of your company, risk profile, and overall needs. Here are a few factors that affect cost, regardless of PEO selection.
Most PEOs charge based on the number of employees you have.
Some PEOs calculate admin fees based on a percentage of your total payroll. If you have higher-salaried employees, you’ll pay more. Conversely, if you have lower-salaried employees, you’ll pay less for headcount.
Not all PEOs include the same benefits in their base admin fee. You pay more if you need advanced compliance support, recruiting or onboard assistance, custom employee handbooks, or dedicated HR professionals.
If your business operates in high-risk industries, such as construction or manufacturing, you’ll often pay more because of workers’ comp premiums and compliance and liability exposure.
If your business operates in high-risk industries, such as construction or manufacturing, you’ll often pay more because of workers’ comp premiums and compliance and liability exposure.
Customization always comes with a price increase. Tech integrations, reporting, or multi-state compliance help will increase PEO pricing.
PEOs change their pricing based on state laws, with fees increasing with complex local healthcare and HR compliance regulations.
Qué buscar
Some PEOs use line-item cost shifting to make their pricing appear more competitive without actually reducing your total cost. So, instead of lowering your costs, they manipulate how costs are allocated in the proposal. Request a fully itemized quote to reduce the risk of this red flag.
Some PEOs force businesses into pre-selected health plans or carriers with no flexibility. This could mean you end up paying for coverage that doesn’t fit your team’s needs or network preferences.
If the admin fee is based on a percentage of payroll, you could end up paying more as salaries increase without receiving additional value in return.
Some PEOs promote “included HR platforms” but later charge for time tracking, employee self-service portals, reporting tools, integrations with payroll or accounting software.
If the contract automatically renews and there’s no option for a mid-year pricing audit, you lose negotiation leverage, particularly if fees quietly rise with time.
It’s tempting to go direct with a PEO, but it could be extremely costly. In reality, working with a PEO broker gives you better pricing, more options, and stronger negotiation power, particularly for small businesses in Houston.
A PEO broker can clarify apples-to-apples comparisons between providers. Instead of being in the dark about what’s included and what isn’t in PEO pricing, you can rely on an expert to break down all the costs associated with your new plan.
Most PEO pricing isn’t straightforward. Some variables include admin fees, benefit costs, tech platform access, and workers’ comp. A good broker knows how to deconstruct a proposal, identify inflated costs or bundled extras, and push back on your behalf, often saving up to 20% or more compared to going direct.
Texas is a unique market, with lower state-mandated coverage requirements, lots of industry variation, and rapidly growing small business hubs like Houston. A local-savvy broker knows which carriers are strong in the region, and which PEOs offer real cost control vs flashy marketing.
Most small business owners aren’t prepared to ask PEOs important questions such as:
These questions help reduce your overall total monthly spend, and a broker knows how and when to ask them.
Conclusión: Two companies with the same headcount can get wildly different quotes. That’s why working with a PEO broker in Houston who represents multiple PEOs is important.
Preguntas frecuentes
Yes, if you want to save on group health insurance and your overall admin and HR costs. A PEO is an excellent option for ongoing support throughout the year, and saves you time managing your team so you can focus on your business.
Yes, you should be able to cancel your PEO mid-year, but keep in mind that some contracts have an early termination clause that would require any additional fees to apply. Be sure to read through your contract to find out if and what fees might apply.
Most PEOs charge around $1500 per employee every year. But those costs vary greatly based on your benefits needs and the size of your business.
PEO pricing typically includes payroll administration, employee benefits management, HR compliance, tax filing, and access to an HR platform. Some PEOs charge separately for things like onboarding support, ACA compliance, or HRIS tools. This is why it is best to get an itemized quote.
A PEO is a service provider while a PEO broker is an independent advisor who helps you compare multiple PEOs. A broker represents you, not multiple companies. They’re you’re best bet at avoiding costly red flags and helping you get the most competitive proposal possible.
Yes. You maintain control over your business and your team. A PEO handles administrative tasks and compliance responsibilities, but you will still manage hiring decisions, set salaries, assign duties, and manage daily performance.
Most PEOs adjust your fees based on your headcount each month. However, contract flexibility varies. Some PEOs allow scaling up or down without penalties; others may charge fees or require notice. A broker can help you find a contract that supports growth.
Let’s find the best PEO to save you time, stress, and money.
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