Professional Employer Organization (PEO)

Let’s decode the term, its fundamentals and its role in growing your business.

What Is A Professional Employer
Organization (PEO)?

A PEO is an outsourcing firm that assists small and medium-size businesses with the tasks related to the employee management, such as human resources, payroll process, tax filings, employee benefits, safety and risk mitigation services.

When a company gets a PEO on board, it essentially forges a co-employment relationship, where the employees are employed by both parties. This set up allows the PEO to take on some of the responsibilities of an employer.   

Using a PEO to take care of the HR and Payroll aspects of a company is a very common practice in countries like the US, where employment regulations vary from state to state.

How Does A PEO Work?

When a company works with a PEO, it is assured of support in payroll processing, insurance and compensation coverage, compliance with local laws, taxations & benefits, etc. The PEO and the client-company can agree to avail all of the services or a selected few of them. This saves a lot of time and cost that otherwise would have been invested if done alone by the company.

The contracts of the employees are with the client-company, however, the remaining processes like compensation negotiations, payroll processing, tax filings, etc. are carried on by the PEO.

How Is A PEO Different From An Employer Of Record (EOR)?

The roles of a PEO and an EOR appear very similar, and a company must know the difference between the two services, in order to make the right choice. The basic difference between the two is – with a PEO, a company has a co-employment relationship, whereas, with an EOR as your partner in a specific geography, it is the legal employer of your employees.



Other difference between PEO & EOR are:

Do you have more questions?

With Skuad, you can hire top remote talent compliantly with in-country payroll across 150+ countries. There is no need to set up a legal entity to hire local talent. We will make the hiring process effortless and take care of your employees’ onboarding, payments, compliances, taxation, termination & more. If you want to explore more, please connect with us now! 

Skuad Spot

hidden costs you need to know when hiring international employees
Hidden Employment Costs You Must Evaluate Before Hiring International Employees

A question that many businesses ask themselves is how easy it is to expand to an international level and…

multi-currency payroll for global teams
What Is A Multi-Currency Account? How Can It Help You With Your Global Team?

Imagine this scenario. You are a fully remote company, and your employees are dispersed across the globe. So, you…

Independent Contractor
Indian Labor Law: How To Tackle Employee Misclassification

In the last few years, Remote work has exploded beyond anybody's imagination. With this upsurge, many people have delved…

© Copyright Skuad 2021. All Rights Reserved