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Is your PEO still the right fit?
A PEO can work well for a company that wants payroll, benefits, workers' comp and HR administration bundled together. But the economics and the service change as a company grows, adds states, raises payroll or wants more control. Thinq breaks down what your PEO actually costs, compares it with the open market, and helps you decide whether to stay, renegotiate or leave. If leaving makes sense, we manage the transition so nothing breaks.
What a PEO actually costs
The invoice may show one total, but the economics usually come from several parts:
Benefits premium
The PEO's plan rates, which may be better or worse than what your group could get on its own.
Administrative fee
Usually a percentage of payroll or a per-employee charge. Its impact changes as payroll and headcount change.
Employer taxes and workers' comp
Often run through the PEO's structure, and more or less competitive than what you could get directly.
The evaluation separates those parts and compares them with what the same company would pay, and manage, outside the PEO. Try the PEO fee check
When a PEO may still be the right answer
- Employees spread across many states, with only a few in each.
- A group whose makeup means the PEO's pooled benefits price better than the open market.
- A company that has priced the trade-off and genuinely wants almost no HR administration in-house.
Signs it may be time to look again
- The admin fee keeps rising with payroll while the service stays the same or gets more junior.
- Payroll or benefits mistakes you're catching after the fact.
- You want your own benefits plan, your own carrier choices and your own vendor relationships.
- You've never seen the admin fee separated from the premium.
Headcount is one input here, not a rule. The answer depends on geography, payroll, benefits pricing, service quality and how much you want to own.
Leaving a PEO, in order
Confirm the contract terms
Notice period, plan-year timing and any exit obligations.
Secure your own benefits
With effective dates that leave no gap in coverage.
Stand up payroll and HRIS
On your own platform, with parallel payroll runs before cutover.
Set up state accounts
Withholding and unemployment accounts in your company's own name.
Move workers' comp
A policy in force on the day the PEO's coverage ends.
Transfer records and tell employees
Records, notices and acknowledgments move over, and employees hear about it once, clearly, with dates.
Timing matters. A transition lined up with a quarter end is usually cleaner for payroll tax filings than one in the middle of a quarter.
See an example PEO exit project map
Common questions
Can we keep our PEO but bring in our own broker?
Usually not for benefits inside the PEO's master plan, because the PEO is the broker of record there. You can still bring in independent advice to evaluate whether the bundle makes sense.
How long does leaving a PEO take?
It depends on the contract, the plan year and how many states you're in. Plan for weeks to a few months, lined up with a quarter end where possible. Faster is possible; faster is also where mistakes happen.
Will our benefits get worse if we leave?
Not necessarily. The modeled comparison answers that for your own employees before you decide, including cost, networks and disruption.
Do you only help companies leave?
No. The goal is to decide whether to stay, renegotiate or leave. Sometimes the answer is to stay and fix how the PEO is set up.
Not sure what you need? Good. That's where we come in.
Most companies come to us knowing something isn't working, not knowing which service to buy. We'll help you figure it out first.