Free PEO Tool
Compare what a PEO would cost you with what it could save you, using your own numbers. The result can come out negative. When it does, the calculator shows what would have to change for a PEO to pay for itself.
Whether you’re a founder, co-founder, or operations leader responsible for small business HR, this calculator will help you:
Each box starts with a sourced average or a neutral assumption. Replace it with your own number.
Range 1–500 employees.
Most PEOs charge $40 to $160. We start at $147, a cautious planning figure near the top of that range. Replace it with a real quote when you have one.
Count the part your company pays, not the employee’s share. We start at $645: the average single-coverage premium at firms with 10 to 199 workers, minus the 16% workers pay (KFF, 2025).
We start at 61%, the average at firms that offer coverage (KFF, 2025).
Count everyone’s time, including yours. We start at about one hour per employee, based on 2.6 HR staff per 100 employees at businesses overall (SHRM, cited by NAPEO).
Only a real quote can settle these. Try a few values to see what moves your result.
Starts at no change. A negative number means the PEO’s plan costs less than yours. Some plans cost more.
We start at 38%. PEO clients averaged 1.6 HR staff per 100 employees, against 2.6 for businesses overall (NAPEO, 2019).
Net gain or cost
-$23,550/ yr
ROI on the fee: -53%
Everything you gain, minus the PEO fee. For 25 employees. See methodology.
Break-even
The PEO pays for itself if its health plan costs at least 21% less than yours.
For scale: NAPEO’s 2019 study found the average PEO client saved $654 per employee a year on health benefits and $965 on HR staff.
Free · No obligation · Takes 2 minutes
Understanding ROI
PEO ROI is what a PEO saves you, minus what it costs, divided by what it costs. A result of 0% means the PEO pays for itself. A negative result means it costs more than it saves in dollars. On the cost side is the admin fee, typically $40 to $160 per employee per month. It covers payroll, benefits administration, compliance support, and HR technology. Health insurance and workers’ comp premiums are billed separately. The best-known study of PEO savings comes from NAPEO, the PEO industry’s trade group, which commissioned it in 2019. It put the average return at 27.2%, counting cost savings alone, and expects roughly half of clients to land above that number and half below. Businesses with above-average HR or health costs are the most likely to land above it. The study leaves out benefits such as lower turnover, and so does this calculator. The calculator starts from no change in your insurance costs, so a first result is often negative. That isn’t a prediction. Change the assumptions to match a real quote and see what it takes to break even.
Calculator Guide
Start with your headcount, then replace our starting values with your own numbers. The calculator works out four things:
Employees times the monthly fee, times 12. We start at $147 per employee, a cautious planning figure near the top of the $40 to $160 range, so a real quote may well come in lower.
We take what you pay now for health coverage and, if you enter it, workers’ comp. Then we apply the change you assume. It starts at no change because the real number depends on the plan you’re quoted.
Your weekly HR hours, times the share the PEO takes over, times the hourly cost. This is real money only if that time goes to other paid work or you spend less on HR staff.
The net is everything you gain minus the fee, and ROI is that net divided by the fee. Break-even shows how much cheaper a PEO’s health plan would have to be to cover the rest.
Cost Drivers
NAPEO’s 2019 study measured average savings of $1,775 per employee a year across these four categories. Your own numbers could land well above or below each one.
The largest category. A PEO takes over payroll, benefits enrollment, and routine paperwork, so your team spends less time on them. PEO clients averaged 1.6 HR staff per 100 employees, against 2.6 for businesses overall.
A PEO buys coverage for many client companies at once, which can lower the cost of comparable plans. It doesn’t always, so compare a real quote with your current plan line by line.
Payroll systems, benefits administration, and outside HR help that you may stop paying for separately.
PEO master policies and safety programs can lower what you pay. The average saving is small, but a high premium leaves more room to save.
Best Fit
High HR costs per employee - The more you spend on HR staff and time, the more a PEO has to replace.
High health costs per employee - A pricey plan leaves more room for a PEO’s plan to cost less.
Owner-operated businesses - When the owner handles HR, every hour handed off can go to the business.
Multi-state employers - A PEO helps with tax, labor law, and compliance differences across states.
Higher-risk industries - A high workers’ comp premium leaves more room to save, if a PEO will take on the risk.
Fast-growing companies - A PEO adds HR capacity before you’re ready to hire an HR team.
Transparency
Each starting value is a sourced average or a neutral assumption. Replace any of them with your own number.
Important: These estimates are directional. Actual results vary by provider, state, industry, risk class, and plan design. Use this calculator for planning and ROI discussion, not as a quote. NAPEO is the PEO industry’s trade group and commissioned the study we cite.
Common Questions
NAPEO’s 2019 study put the average at 27.2%, counting cost savings alone, and expects roughly half of clients to land above that and half below. Anything above 0% means the PEO pays for itself in dollars. A result below 0% can still make sense if you value benefits the math leaves out, such as lower turnover. Go in knowing what you’re paying for them.
PEO admin fees typically range from $40 to $160 per employee per month. Some PEOs charge a percentage of payroll (2–12%) instead of flat per-employee fees. This calculator starts at $147, a cautious planning figure near the top of the range, not a market average. Actual costs depend on services selected, company size, industry, and negotiation.
Because the calculator starts by assuming your insurance costs don’t change. We can’t know what a PEO’s plan would cost you, and a made-up discount would make every result look good. Change the assumption to match a quote, or read the break-even line to see what it would take.
It does if the time goes to other paid work or you spend less on HR staff. NAPEO’s study counts HR staff costs as its largest saving. If those hours wouldn’t really be freed up, lower the share the PEO takes over, or set it to 0% to see the result without them.
No calculator can guarantee results. Actual savings depend on your current costs, the PEO you select, your industry risk classification, employee demographics, and how you use PEO services. This calculator provides estimates. For realistic projections, request quotes from multiple PEOs and ask them to compare against your current costs line by line.
Our PEO ROI Calculator (this page) weighs the fee against savings from your own numbers and shows what it takes to break even. Our PEO Cost Calculator focuses only on what you’ll pay in admin fees. Our PEO Savings Calculator estimates net savings after fees.
Use the fully loaded hourly cost of whoever currently handles HR tasks. If that’s the business owner, consider their billable rate or the opportunity cost of their time. If it’s an office manager or HR coordinator, use their salary divided by 2,080 hours plus ~30% for benefits. The $40–$100 range covers most small business scenarios.
Get Started
Ready to see what a PEO will actually cost, and save for your specific business? Our partner, The Huldisch Group, provides free, no-obligation quotes from top PEOs. They’ll analyze your employee count, industry, locations, and current costs to deliver a clear cost-benefit comparison.
Request Personalized QuotesFree · No obligation · Takes 2 minutes