PEO and Flat-Fee HR Cost Calculator

Professional employer organizations quote their administration fee either as a percentage of payroll, as a flat amount per employee per month, or as a mix. This calculator shows the yearly fee under whichever structure you enter so you can compare it with a stand-alone HR software subscription. Enter your annual gross payroll, the percentage fee, a flat yearly fee per employee (multiply a monthly fee by 12) and your headcount.

Formula: yearly fee = (payroll x percentage / 100) + (flat fee per employee x employees). The last line subtracts the fee and any other yearly costs from payroll purely for reference.

Worked example (illustrative): payroll of $1,500,000, a 2 percent fee, a $300 yearly flat fee and 30 employees gives 1,500,000 x 0.02 + 300 x 30 = 30,000 + 9,000 = $39,000 per year, or about $1,300 per employee.

Limits: a PEO bundle usually also includes workers' compensation, benefits access and payroll tax handling, and those costs are priced separately or built into the rate. This tool covers only the administration fee, so compare total cost of the whole package, not this line alone. Ask the PEO for a written breakdown of every component.