A Professional Employer Organization — a third-party company that becomes the legal co-employer of your staff for payroll, tax, and benefits purposes while you retain operational control over hiring and work.

PEO vs EOR — what's the difference?

PEO is co-employment, typically domestic. You and the PEO share employer responsibilities. EOR is sole-employer in jurisdictions where you have no entity (international expansion). PEOs are mostly a US construct; EORs are global.

How much does a PEO cost?

Typically 2–12% of gross payroll, varying by provider and benefits package. Pricing is per-employee per-month or percentage of payroll depending on the PEO's model.

Are PEOs available in Georgia?

Not directly — Georgian law doesn't have a co-employment construct. Closest alternatives: outsource HR admin to a Georgian HR services firm (you stay the employer), or use a modern HR SaaS platform that handles compliance without co-employment.

HR GLOSSARY · Employment law

PEO

Also known as: Professional Employer Organization, Co-employment

A PEO (Professional Employer Organization) is a third-party company that enters a co-employment relationship with a client — the PEO becomes the legal employer-of-record for payroll, tax, benefits, and compliance purposes while the client retains operational control over hiring, firing, and day-to-day work. Primarily a US construct, though similar models exist in other markets.

PEOs solved a different problem than EORs. Where EORs let companies hire abroad without entities, PEOs let small US companies access enterprise-grade benefits (health insurance, 401k, workers' comp) by pooling employees with the PEO's broader book. The PEO handles HR admin and compliance; the client handles work and team. PEOs are most common in the US — the model maps less cleanly to single-payer healthcare countries.

PEO vs EOR vs traditional outsourcing

PEO: co-employment, typically domestic. You + PEO share employer responsibilities. PEO files taxes under its own EIN, employees get PEO's benefits
EOR: sole-employer in jurisdictions where client has no entity. International expansion focus
HR outsourcing / BPO: third party does HR admin but does not become a co-employer. Client retains full employer-of-record status

When PEOs make sense

US small businesses (5–100 employees) wanting enterprise-level benefits without enterprise-level administrative overhead. The PEO's pooled health insurance often costs less than what a 20-person company could negotiate alone. PEOs also reduce HR admin burden — payroll, benefits enrollment, workers' comp claims, state-by-state compliance — to the level of "approve the PEO's monthly invoice."

Trade-offs to consider

Benefits flexibility — you take what the PEO offers; can't customize
Exit friction — switching off a PEO requires re-onboarding all employees
Cost — typically 2–12% of gross payroll; varies by PEO and benefits package
Loss of HR institutional knowledge — the PEO has it, not you
Brand identity — payroll deposits from the PEO's name, not yours

Frequently asked questions

What is a PEO?: A Professional Employer Organization — a third-party company that becomes the legal co-employer of your staff for payroll, tax, and benefits purposes while you retain operational control over hiring and work.
PEO vs EOR — what's the difference?: PEO is co-employment, typically domestic. You and the PEO share employer responsibilities. EOR is sole-employer in jurisdictions where you have no entity (international expansion). PEOs are mostly a US construct; EORs are global.
How much does a PEO cost?: Typically 2–12% of gross payroll, varying by provider and benefits package. Pricing is per-employee per-month or percentage of payroll depending on the PEO's model.
Are PEOs available in Georgia?: Not directly — Georgian law doesn't have a co-employment construct. Closest alternatives: outsource HR admin to a Georgian HR services firm (you stay the employer), or use a modern HR SaaS platform that handles compliance without co-employment.