Staffing & Temp Agencies
PEO Cost Calculator
Compare PEO costs vs managing HR in-house for your staffing & temp agencies business. Calculate real ROI including hidden savings from reduced turnover, compliance protection, and group purchasing power.
Staffing & Temp Agencies Industry Benchmarks
Calculation Methodology
Current Cost Calculation: We sum all direct HR costs (staff compensation, payroll processing, workers' comp, health benefits, compliance, EPLI, recruiting) plus the opportunity cost of owner time spent on HR activities (valued at $75/hour).
PEO Cost Calculation: PEO admin fee x employees x 12 months, plus adjusted health benefits cost (reduced by 13% through PEO group purchasing), plus adjusted workers' comp (reduced by 28% through PEO pooled programs).
Hidden Savings: We calculate additional PEO value from: (1) Turnover reduction — PEO clients average 10-14% lower turnover (NAPEO data), valued at the industry-specific replacement cost; (2) Compliance penalty avoidance — estimated at $3,500/year average for the staffing & temp agencies industry; (3) EPLI coverage value — typically $3,000-$8,000/year when purchased separately.
Limitations: Actual PEO costs vary by provider, location, and specific services included. This calculator provides estimates based on industry averages. Request actual PEO quotes for accurate pricing.
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Why Staffing & Temp Agencies Businesses Use PEOs
Staffing agencies face the highest HR complexity of any industry due to the volume of employee onboarding/offboarding, multi-state operations, and joint employer liability concerns. PEOs provide critical infrastructure to manage this complexity at scale.
Workers' compensation is a major cost driver at $4.50 per $100 of payroll, amplified by the diverse job assignments and worksite risks that temporary employees face. PEOs reduce WC costs by 28% through pooled programs and provide worksite safety assessments.
Joint employer liability is a constant concern — staffing agencies share employment responsibilities with client companies, creating complex risk allocation. PEOs add another layer to this relationship but can actually reduce risk through professional HR infrastructure and EPLI coverage.
ACA compliance is exceptionally complex for staffing agencies due to the variable-hour nature of temporary assignments. Tracking measurement periods, determining eligibility, and managing offers of coverage across thousands of temporary employees requires sophisticated systems that PEOs provide.
What a PEO costs a staffing firm
Staffing firms manage large, fluid workforces and the co-employment and compliance questions that come with them. A PEO can take on payroll, benefits, workers compensation, and HR compliance, though staffing firms should weigh how PEO co-employment interacts with their own client co-employment arrangements.
PEOs price as a percentage of payroll or a flat per-employee-per-month fee. This calculator estimates the cost against your headcount and payroll so you can compare it to handling these functions across a constantly changing roster in-house.
What this calculator accounts for:
- Payroll across a large, fluid workforce
- ACA variable-hour eligibility tracking
- Workers compensation and HR compliance
- Benefits access to attract better talent to place
For broader context, see NAPEO, the national PEO industry association.
Compare what a PEO bundles against doing it yourself, then test the benefits side in the Benefits ROI Calculator and the Health Plan Cost Projector.
Frequently asked questions
Does PEO co-employment conflict with staffing?
It can interact in complex ways, so staffing firms should review the arrangement carefully. The calculator focuses on the cost comparison.
How is PEO cost structured?
As a percentage of payroll or a flat per-employee-per-month fee, often with workers comp bundled.
What should I compare it to?
Your current cost of payroll, benefits, workers comp, and compliance across your roster.