Glossary · Compliance
What is PEO
Also called: professional employer organisation.
Definition
A professional employer organisation co-employs your internal staff, providing payroll, benefits and HR infrastructure under a shared-employment model.
Applies to: US · Reviewed by James Doyle
In practice
A PEO is usually for your own employees — recruiters, ops staff — not for the contractors you place. It buys access to benefits pricing a small agency could not get alone.
An EOR, by contrast, is the legal employer of a worker in a place you do not operate. Agencies frequently confuse the two in their first year.
Related terms
EOR
An employer of record legally employs a worker on your behalf in a jurisdiction where you have no entity, handling payroll, tax and compliance.
ReadCo-employment
A situation where both the staffing agency and the client are treated as employers of the same worker, sharing legal obligations and liabilities.
Read
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