How Does It Work?
How does B2B Connections reduce my cost by using PEO?
A PEO provides you with Worker’s Compensation as they process your payroll. The payroll taxes are paid under the PEOs Federal Identification Number. This allows you to have the following benefits:
Payroll taxes are paid as the payroll is processed so you will never fall behind on payroll taxes.
You will pay less in State Unemployment taxes because the PEO has a much lower tax assessment than the average small to midsize company.
You will pay less for Worker’s Compensation because the PEO buys Worker’s Compensation much lower cost than a small to mid-size business. It is simple economies of scale.
The PEO can also reduce your cost and administration on Group Health Benefits. This is again, economies of scale.
How does a PEO work?
Most companies pay their payroll taxes quarterly. The worker’s compensation premiums are paid monthly (after an initial down payment). Then most companies reconcile numerous payroll checks each month along with fulfilling other fees that go along with payroll administration. A PEO puts together a billing rate that encompasses all those costs. On average a PEO will reduce your company’s cost by 1.25% of your gross payroll.
For example, let’s say that your company runs a weekly gross payroll of $5000 and the billing rate from the PEO is 15%. The PEO would process your payroll, direct deposit funds into your employee’s accounts, deposit all applicable State/Federal payroll taxes, and provide you with Worker’s Compensation coverage. The PEO would then draft $5,750 (5000*1.15=$5,750) from your account. There are no other charges and you will never worry about Payroll or Worker’s Compensation audits again. Using industry averages this company should see a reduction in cost of $62.50/week or $3,250/annually.
What is needed to get a quote?
B2B Connections makes the application process simple. We can produce a quote and a detailed cost comparison with the following information:
- Company Name, email, FEIN, and web address
- Ownership information
- Clear description of the scope of work performed by employees
- Number of employees by job description
- Estimated annual revenue
- A copy of current Worker’s Comp policy
- A copy of your most recent quarterly State Tax Unemployment
