PEO Services in the USA

A co-employment model for companies with a US entity that want to share the employer relationship rather than hand it over entirely. We help you work out whether PEO or EOR genuinely fits, and place you with the right vetted partner.

  • Independent advice
  • Vetted partners
  • Honest positioning

What a PEO does in the USA

A Professional Employer Organization works on a co-employment model under a Client Service Agreement. You and the PEO partner share the legal employer responsibilities for your US staff: you keep direction and day-to-day control, while the partner administers payroll, FICA, benefits, and HR compliance under the shared arrangement.

01

Shared employer role

You and the PEO partner share the legal employer responsibilities. You keep direction and control; they handle payroll, FICA, benefits, and HR administration.

02

More direct control

PEO suits companies that already have a US entity and want to streamline HR, payroll, and benefits while keeping control. It is a well-established US model, distinct from EOR, which needs no entity.

03

Honest recommendation

If you have no US entity yet, EOR is usually simpler. We will tell you honestly whether PEO genuinely fits your structure, or whether EOR serves you better.

How PEO works in the USA, step by step

From assessing the fit to a compliant co-employment arrangement.

01 — Assess the fit

We map your structure, headcount, and how much control you want to keep, and tell you honestly whether PEO or EOR serves you better. No product push.

02 — Set up co-employment

If PEO fits, we place you with a vetted US partner and structure the co-employment arrangement correctly.

03 — Onboard your people

Compliant US employment terms under federal and state law, with the administrative employer functions handled by the partner.

04 — Payroll & compliance

Federal and state withholding, FICA, and filings handled monthly, while you keep day-to-day direction.

What PEO in the USA costs

As with EOR, two parts: the statutory cost of employment (which varies by state) and the partner service fee. A PEO’s pooled buying power can also lower your benefits and workers’ comp rates.

Employer FICA

Employer FICA runs 7.65% of wages (6.2% Social Security up to the wage base, plus 1.45% Medicare), with federal and state unemployment and workers’ compensation administered under the shared employer arrangement.

Minimum wage (2026)

Federal $7.25 per hour, but many states set far higher (California $16.90, Washington $17.13). You pay the highest applicable rate.

Income tax (employee)

Federal 10% to 37% across brackets, plus state income tax in 41 states (0% to 13.3%). Borne by the employee.

PEO partner fee

A service fee for the co-employment administration. We benchmark across our vetted network, typically 15 to 25% below going direct.

Why arrange it through Bradford Jacobs

Why companies arrange US PEO through us rather than going direct to a single provider.

We tell you if PEO fits your needs

We are independent: we assess what you actually need, place you with the right vetted partner, secure pricing you will not get going direct, and stay on your side to escalate or renegotiate. You get advice, not a product pitch.

  • Independent advice
  • Vetted partners only
  • On your side at renewal

Pricing you can’t get direct

The co-employment structure itself and the federal FICA obligations underneath it are the same regardless of provider; state unemployment insurance is the only piece that moves, and it moves by claims history, not negotiation. What varies is the partner’s own service fee, and that is what we benchmark across our vetted network, typically 15 to 25% below going direct, and renegotiate for you at renewal.

  • 15-25% below direct
  • Network benchmarking
  • Renegotiated for you

Straight to the top when it matters

When something needs resolving, and in global employment it sometimes does, you come to us. We escalate directly, past the helpdesk, to people who can actually move it.

  • Direct escalation
  • No support queues
  • Named account contact

Two decades of placements

Two decades placing and managing employment arrangements internationally. Only IRS-certified PEOs (CPEOs) preserve an employee’s FICA and FUTA wage base if you switch providers mid-year; move to an uncertified one and both wage bases restart, costing you real money on every employee already past the cap. We only work with CPEO-certified partners for exactly that reason.

  • Co-employment expertise
  • Honest fit advice
  • Right structure

We flex as your structure changes

PEO, EOR, and your own entity sit on a spectrum, and the right point shifts as you grow. We advise on the path and manage the moves, EOR to PEO, or either to your own US entity, as your US presence develops.

  • EOR, PEO or entity
  • Transitions managed
  • Right fit as you grow

The US obligations co-employment covers

Whichever model you use, the underlying US rules are the same. Under a PEO arrangement, the administrative employer functions are handled for you.

Working time, leave & contracts

Compliant contracts and working-time rules (40-hour week, overtime over 40 hours under the FLSA). Federal and state tax and FICA withheld and filed correctly. Statutory benefits and lawful exits applied properly.

Statutory protections & exits

The federal and state protections US employees carry (anti-discrimination, FMLA, workers’ compensation), all handled under the shared arrangement. The value is the same as with EOR: the compliance is handled by people who do it daily. The difference is simply how much of the employer role you keep, and that a PEO works alongside your own entity.

What a PEO arrangement covers

The co-employment administration covers all of this, under one transparent fee.

Compliant contract

A compliant US employment contract under federal and state law, issued and maintained for you.

Payroll & filings

Monthly payroll run, with federal and state withholding and FICA calculated, withheld, and filed each month.

Statutory benefits

All statutory obligations administered: FICA, federal and state unemployment, workers’ compensation, and FMLA leave where eligible.

Compliance & support

Ongoing HR compliance and a single point of contact, for the life of the engagement.

Your questions answered

Straight answers on how PEO co-employment works in the US.

What is the difference between PEO and EOR in the US?

With an EOR, the partner is the sole legal employer of your US staff and you need no entity. With a PEO, you and the partner share the employer relationship alongside your own US entity, you keep more direct control, they handle the administration. EOR enters the market; PEO streamlines once you have an entity.

If you have no US entity, EOR is simpler and faster. PEO fits when you already have an entity and want to share rather than outsource the employer role, streamlining HR and benefits. We assess your situation and recommend honestly.

Generally yes. A PEO co-employs alongside your own US entity. If you have no entity and want none, EOR is the cleaner route. We will confirm which applies to you.

The administrative employer functions, payroll, federal and state withholding, FICA, benefits, and filings, are handled by the partner. We make sure the arrangement is structured so responsibilities are clear and federal and state law is met.

The statutory employer cost (employer FICA of 7.65% plus unemployment and workers’ compensation) plus a partner service fee for the co-employment administration. A PEO’s pooled buying power can also lower benefits costs. We benchmark across our network for pricing typically 15 to 25% below going direct.

Yes. These models sit on a spectrum and the right one changes as you grow. We advise on the path and manage transitions, EOR to PEO, or either to your own US entity, as your US presence develops.

Not sure whether PEO or EOR is right for the US?

Tell us your structure and headcount and we will give you an honest recommendation, usually within a day, plus pricing you will not get direct. No product push, just the right fit.

Tax and labor data verified June 2026 (IRS, DOL, OECD). Figures change; we confirm the current position when we scope your hire.