PEO vs ASO: which is right for you?
An ASO (administrative services organization) runs HR administration without co-employment, so you keep your own tax ID and benefits plans. A PEO co-employs your staff and pools benefits and workers' comp. ASOs cost less but don't bring pooled buying power.
How they differ
- Co-employment: PEO yes; ASO no
- Tax ID used for payroll: PEO's; yours with an ASO
- Benefits: PEO's pooled plans; your own plans with an ASO
- Workers' comp: usually included with a PEO; usually not with an ASO
What an ASO costs
About $50–$100 per employee per month (Business News Daily, Capterra), compared with $40–$160 for most PEOs. The PEO fee often buys pooled benefits that save more than the difference.
Providers that offer both
G&A Partners sells PEO and ASO plans, and TriNet offers an ASO product (HR Plus). That makes moving between models easier as you grow.
When to choose an ASO
- You already have competitive benefits you want to keep
- You've outgrown a PEO's pricing (often 100–300 employees)
- You don't want co-employment
Questions buyers ask
Is an ASO cheaper than a PEO?
The admin fee usually is, at about $50–$100 per employee per month. Total cost depends on whether your own benefits and workers' comp cost more than the PEO's pooled rates.
Can I switch from a PEO to an ASO?
Yes. Plan around benefit renewal dates, and choose a provider that offers both to keep systems the same.