Who does what when you team up with a PEO? Quick answer: co-employment means you run the business, and a Professional Employer Organization is the employer of record for taxes and benefits paperwork. It’s a simple split so you’re not buried in forms.
Co-employment in plain English
Think pit crew vs. driver. You steer, hire, and set the pace; the PEO tunes the engine of payroll, benefits, HR, and compliance so your small business runs smoother. When Anthony’s 11-person digital media company got busy, he stayed on clients while his PEO handled paychecks and forms.
You own these
- Hiring decisions and who joins or leaves.
- Pay rates, raises, bonuses, and budgets.
- Work schedules and time-off approvals.
- Culture, values, and how your team works.
- Performance goals, feedback, and day-to-day supervision.
The PEO handles these
- Payroll processing and payroll tax filings.
- Benefits shopping, enrollment, and admin.
- Workers’ comp policy and claims coordination.
- Unemployment claims management.
- HR compliance docs, notices, and records.
- Onboarding/offboarding forms.
Shared/depends
- Policy drafting and handbook updates: the PEO advises; you decide.
- Investigations: the PEO guides process; you lead outcomes.
- Safety training: the PEO provides tools; you run the floor.
- Leave management (FMLA, PTO): the PEO helps; you approve.
Next step
Ready to map roles for your own team? Grab our comparison checklist or read: “What Does a PEO Cost?”