What is a PEO?

A PEO (Professional Employer Organization) is an organization that has a co-employer relationship with a business. PEOs typically pay the employees, and file and pay payroll taxes for a business using the PEO’s own EIN and tax IDs (reporting rules vary by state). They may also handle insurance for a business, such as health benefits and workers’ compensation plans.

An ASO (Administrative Services Organization) is an organization that you use to outsource your payroll (and/or other HR and insurance needs). They would use your company’s own FEIN and tax IDs to file your taxes. They would not have a co-employer relationship with your business.

Looking to switch from a PEO to Gusto? Learn more here.

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