Do You Need a PEO, an EOR, an ASO or Just Payroll?
Answer four questions about entity coverage, headcount, what you are trying to fix, and whether you want to keep your own benefit plans. The tool applies four fixed rules, in order, and tells you which arrangement fits — including when the answer is to stay where you are.
The rules it applies
They are published so you can check the answer rather than trust it. They run in order, and the first one that fires wins:
- No legal entity where the person will work → EOR. Co-employment presumes
you are already an employer there. No amount of contract drafting changes that.
- Fewer than about five worksite employees → payroll service. Most PEOs will
not quote you, and those that will tend to price where the benefits advantage no longer covers the fee.
- You want to keep your own benefit plans and broker → ASO. You want the
administration lifted without giving up the plans. That is a different product.
- Otherwise → PEO, with a caution flagged when workers' compensation is the
main driver, because master-policy access is genuinely valuable and genuinely awkward to unwind mid-year.
Four rules will not capture every situation, and the tool does not pretend otherwise. It captures the ones that decide most cases, and it shows its working.
The one question that decides most cases
Of the four rules, the first one decides more situations than the other three combined. Do you have a legal entity where this person will work? If you do not, the rest of the comparison is moot: no PEO, no matter how good, can co-employ someone in a jurisdiction where you are not an employer to begin with. That is the case for an EOR, and the higher per-head cost of an EOR is the price of carrying the legal employment itself.
Two of these answers cost us money
Rules 2 and 3 send you away from the thing we are paid to introduce you to. They are in the tool because a decision aid that only ever recommends the paid option is not a decision aid.
If that seems like an odd thing to advertise, it is the same reason the match form asks six questions instead of two: we are paid on qualified introductions, so sending you somewhere that cannot serve you is a cost to us, not a win. The full commercial model is here.
What each arrangement actually changes
| PEO | EOR | ASO | Payroll service | |
|---|---|---|---|---|
| Legal employer | You and the provider | The provider | You alone | You alone |
| Your own entity required | Yes | No | Yes | Yes |
| Your benefit plans | Replaced by the provider's | The EOR's local plans | Kept | Kept |
| Typical use | 5+ employees, benefits and compliance scale | Hiring where you have no entity | Plans worth keeping, admin lifted | Very small or simple payroll |
The table is a simplification of four longer arguments. Each has its own explanation: PEO vs EOR, PEO vs ASO, PEO vs payroll service.
Read the long versions
Frequently asked
What is the difference between a PEO and an EOR in one sentence?
A PEO co-employs people you already employ through your own entity; an EOR becomes the sole legal employer where you have no entity. If you have no entity where the person will work, a PEO cannot serve you.
When should I not use a PEO?
When you have no legal entity in the hiring jurisdiction, when you have fewer than about five worksite employees, or when you want to keep your own benefit plans and broker — those are EOR, payroll-service and ASO territory respectively.
Can I use a PEO and an EOR at the same time?
Yes, and larger employers frequently do — a PEO for the domestic workforce where you have entities, and an EOR for countries or states where you do not.
Get matched with up to three PEOs
Answer six questions about your headcount, states and timeline. We shortlist providers that can actually serve you, and you choose which ones may contact you.
No obligation. You pick which providers get your details. We never sell your information to a data broker.