How to Compare PEO Quotes Fairly
Two PEO quotes are not the same number until you separate the admin fee from the insurance, the benefits and the pass-through tax. Compare like for like, or the lowest headline is also the one most likely to surprise you.
The bundling problem
A quote that folds administration, insurance and pass-through into one line hides the trade you are actually making. Compare the unbundled pieces or you are comparing apples only when it suits. See per-employee vs percentage-of-payroll for how the models are priced.
Separate the layers
| Layer | What it is | How to compare |
|---|---|---|
| Administrative fee | What the PEO charges for running payroll, tax, benefits | PEPM or flat, on the same basis |
| Benefits/insurance | Health, workers' comp, life | Same plan design and contribution |
| Pass-through | Taxes you would pay anyway | Not PEO margin; exclude from comparisons |
Force the same model
Ask each provider to quote the identical frame: same headcount, same states, same plan design, same contribution. Then knock the pass-through out of the calculus. The provider that answers in that frame is the one you can compare honestly. The one that refuses is telling you exactly how its price is built.
Watch the not-priced items
The hidden fees sit outside the headline. Off-cycle runs, year-end corrections and data portability only show up at renewal. Ask for them on the quote so the fourth price stays the price you pay.
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Frequently asked
Why do two PEO quotes look so different?
Because they are rarely built the same way. One may be PEPM with insurance inside, another flat fee with benefits quoted separately. Difference in model, not always in cost.
What should I exclude when comparing?
Know your taxes and benefits pass-through. They are dollars you pay anyway, not PEO pricing. Compare only the part the PEO actually charges for its services.
Should I get the hidden fees in writing?
Yes. Implementation, off-cycle, and year-end fees should each have a line, or renewal is where the number grows.
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