The biggest difference is who the employer of record is. With a PEO, the PEO shares that responsibility with you which unlocks access to their master insurance policies and group rates. With an ASO, you stay the sole employer and keep your own insurance, but you outsource the HR administration work. A PEO generally delivers better benefits pricing. An ASO gives you more employer-side control. The right answer depends on your industry, your current insurance situation, your state's regulations, and your risk appetite. Not sure which fits you? That's literally what our free consultation is for.

Payroll software just processes payroll. A PEO does that and a whole lot more, it acts as a co-employer that gives you access to group health insurance at large-company rates, workers' comp coverage, 401(k) plans, HR compliance expertise, and legal protection you couldn't access as a 30 or 50-person company. The difference in total cost — when you factor in benefits, compliance, and risk — is often significant. Many businesses that switch from a payroll-only setup to a PEO are surprised by how much they were leaving on the table.

PEOs are actually most valuable for small and mid-sized businesses, typically companies with 10 to 500 employees, but can also be a great fit for larger businesses depending on infrastructure and needs. Most large enterprises already have the buying power to negotiate their own rates and build their own HR infrastructure. A PEO can level the playing field for SMBs. It can give a 40-person company access to the same caliber of benefits, compliance support, and HR technology as a 4,000-person company. If you're an SMB and not using a PEO, you're almost certainly overpaying for your benefits and leaving risk on the table.

PEO pricing typically comes in two forms: a percentage of gross payroll (usually 2–8%) or a flat per-employee-per-month fee (typically $80–$200 per employee). But here's the thing — these numbers mean almost nothing without context. The same provider can charge two companies with similar headcount wildly different rates based on industry, state, renewal history, and how well they negotiate. That spread is exactly where Replafi shows its value and saves you money!

Most PEO arrangements bundle together payroll processing, tax filing, HRIS technology (think employee self-service portals, time tracking), group health benefits, dental and vision, 401(k) administration, workers' compensation, ACA compliance reporting, and HR support. The actual services and quality vary a lot between providers which is one reason choosing the right PEO matters more than people realize. Some bundle everything. Others nickel-and-dime you with add-on fees for things you assumed were included. Let Replafi help you make sense of it.

Nope, this is the most common misconception about PEOs. The "co-employment" relationship is really just a legal and tax arrangement. You remain 100% in control of who you hire, how you manage them, how you develop them, and when you let them go. The PEO handles the administrative back-office stuff like payroll processing, tax filings, benefits enrollment, compliance so you don't have to. Think of it like outsourcing accounting, your accountant handles the numbers, but they're still your employees and your business.