conservative
Conservative
Lower-end savings assumptions. You may already have decent group rates, operate in a low-risk industry, or use a basic PEO service tier. Best for pessimistic planning or businesses with existing HR infrastructure.
Free PEO Tool
Use the PEO ROI calculator below to compare what you’d pay in admin fees with the hard-dollar savings and time savings you gain by outsourcing HR to a Professional Employer Organization.
Whether you’re a founder, co-founder, or operations leader responsible for small business HR, this calculator will help you:
Range 1–500 employees.
Adjusts assumptions for benefits, workers’ comp, and HR time savings.
Net Cash Savings
$33,766/ yr
Cash ROI: 77%
Hard-dollar savings minus PEO admin fees — the change to your P&L. For 25 employees, scenario: typical. See methodology.
Estimated PEO admin fee
$44,063/ yr
$147 per employee / mo
Hard-dollar savings
$77,828/ yr
Benefits, workers’ comp & other HR efficiencies
Time savings value
$16,669/ yr
417 hrs / yr at $40/hr
Free · No obligation · Takes 2 minutes
Understanding ROI
PEO ROI measures the return on investment from partnering with a Professional Employer Organization. It’s a simple equation: total savings minus total costs. But understanding what goes into each side of that equation is where most businesses get stuck. On the cost side, you’ll pay a monthly admin fee, typically $100–$200 per employee. This covers payroll processing, benefits administration, compliance support, and HR technology. On the savings side, you gain from three sources: hard-dollar savings on health insurance and workers’ compensation through group purchasing power, plus the monetary value of time you reclaim by outsourcing HR administration. Our calculator shows both your Cash ROI (hard-dollar savings minus fees) and your Total ROI (including the value of time saved). For most small businesses, net PEO cost savings often range from 20–40% above admin fees, making PEOs one of the highest-ROI investments available.
Calculator Guide
Enter your employee count and the hourly cost of whoever handles HR today (often the owner or office manager). The calculator estimates four key metrics:
What you’ll pay. We use a median PEO cost per employee of $147/month based on current market rates. This covers payroll, benefits administration, compliance, and HR support.
Direct cost reductions you’ll see on your books. This includes health benefits savings (typically 10–30%) and workers’ compensation savings (15–40% through risk pooling).
HR automation frees up hundreds of hours annually. We calculate the dollar value by multiplying hours saved by your specified hourly rate for owner-operators.
The bottom line. Cash ROI compares hard-dollar savings against fees. ROI including time adds the monetary value of hours reclaimed. Most businesses see 70–120%+ total ROI.
Projection Models
Not all PEO partnerships deliver the same results. Your actual ROI depends on your current costs, how much you negotiate, and which services you use. We provide three scenarios to bracket realistic outcomes:
Lower-end savings assumptions. You may already have decent group rates, operate in a low-risk industry, or use a basic PEO service tier. Best for pessimistic planning or businesses with existing HR infrastructure.
Median results based on industry benchmarks. Reflects the experience of a typical 25–50 employee business switching from self-administered HR to a full-service PEO. Use this for realistic budgeting.
Upper-range savings. Applies if you currently have poor group rates, operate in a high-risk industry (construction, healthcare, manufacturing), or your owner spends significant personal time on HR tasks.
Tip: Compare quotes from multiple PEOs. Pricing varies significantly, and competition often produces better rates than posted estimates.
Cost Drivers
PEO ROI comes from three distinct sources. Understanding each helps you evaluate whether a PEO makes sense for your specific situation:
PEOs pool thousands of employees together, giving small businesses access to large-group health insurance rates. This purchasing power typically reduces medical premiums by 10–30% compared to small-group or individual market plans.
PEOs achieve lower workers’ comp rates through risk pooling, professional claims management, and safety programs. Your experience modification factor (EMR) benefits from being part of a larger, professionally managed pool.
HR automation and outsourcing eliminate hundreds of hours spent on payroll processing, benefits enrollment, compliance updates, and employee paperwork.
Best Fit
Companies with 10–100 employees - Large enough to benefit from group rates, small enough that HR overhead is disproportionately high.
Businesses paying high health insurance premiums - Small-group rates are often 20–40% higher than what PEOs can access.
Higher-risk industries - Construction, manufacturing, healthcare, and staffing see major workers’ comp savings.
Multi-state employers - PEOs handle tax, labor law, and compliance complexity across jurisdictions automatically.
Owner-operated businesses - When the CEO handles HR, every reclaimed hour has high opportunity cost.
Fast-growing companies - PEOs provide scalable HR infrastructure without proportional cost increases.
Transparency
This calculator uses industry benchmarks and conservative modeling to estimate PEO ROI:
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. For accurate pricing, request proposals from multiple PEO providers.
Common Questions
Most businesses see Cash ROI of 50–100% (meaning hard-dollar savings exceed admin fees by 50–100%). When you include time savings value, total ROI often reaches 100–150% or higher. If your ROI calculation shows less than 20–30%, you may want to compare more PEO providers or evaluate whether a lighter HR solution fits better.
PEO admin fees typically range from $100 to $200 per employee per month, with $140–160 being most common for full-service arrangements. Some PEOs charge a percentage of payroll (2–12%) instead of flat per-employee fees. Our calculator uses $147/month as a median estimate, but actual costs depend on services selected, company size, industry, and negotiation.
Cash ROI measures only hard-dollar savings (health benefits + workers’ comp reductions) against admin fees. This is what directly impacts your P&L and cash flow. Total ROI adds the monetary value of time saved, hours that can be redirected to revenue-generating activities. For owner-operators, Total ROI often matters more because their time has high opportunity cost.
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 based on industry averages. For realistic projections, request quotes from multiple PEOs and ask them to compare against your current costs line by line.
Start with Typical for baseline planning. Use Conservative if you already have competitive group rates or operate in a low-risk industry. Use High if you’re in construction, healthcare, or manufacturing, have poor current rates, or if the owner spends significant time on HR. When in doubt, get real quotes as they’ll be more accurate than any scenario.
Our PEO ROI Calculator (this page) shows the complete picture: costs vs. all savings types with net ROI. Our PEO Cost Calculator focuses only on what you’ll pay in admin fees. Our PEO Savings Calculator estimates net savings after fees. Use this ROI calculator when you want to see the full equation in one view.
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