How much does it cost to outsource HR?

As of October 2026, published PEO prices start at $79 per employee a month at Justworks, $99 at Remote and $125 at Deel for US employees. HR software plans with an advisor cost less but do less.

What is the difference between a PEO and an HR outsourcing company?

A PEO co-employs your staff and runs payroll, taxes and benefits under its own tax ID. An HR outsourcing firm or consultant advises and does tasks, but you stay the only employer.

At what size should a small business outsource HR?

There is no single number. Look at it when HR takes hours each month, when you need benefits to hire, or as you near the federal lines at 15, 20 and 50 employees.

Can I outsource HR and still choose my own policies?

Yes. You still decide pay, hiring, firing and culture. The provider supplies templates, compliance checks and advice, and handles the paperwork.

Outsource HR for small business: what it covers and costs

Outsourced HR is a range. At the light end, a payroll plan with HR guidance costs a little more than payroll alone. Gusto Premium, for example, is $180 a month plus $22 per person. At the full end, a PEO co-employs your team for about $79 to $125 per employee a month and handles payroll, compliance and benefits. It is worth it once hiring, firing and benefits start eating your time or carrying legal risk. Prices are as of October 2026, in US dollars.

What outsourced HR covers

Most providers cover some mix of these:

Payroll, payroll taxes and year-end forms.
Onboarding: offer letters, I-9 forms, state new-hire reporting.
An employee handbook and policies that fit your states.
Benefits: health plans, 401(k), and the admin around them.
Workers' compensation insurance and claims.
Advice on hard cases: performance problems, leave requests, terminations.
Compliance checks as laws change and as you hire in new states.

What it does not cover: deciding who to hire, setting pay, managing people day to day, and building the culture. Those stay with you.

The three models

HR software with expert help

Payroll and HR software with an advisor on call. You do the work with good tools and ask questions when needed. Gusto's Premium plan, at $180 a month plus $22 per person, includes HR guidance and a named advisor. Rippling says its plans start at $8 per employee a month plus a base fee, and quotes the full price by the products you pick.

A PEO

A professional employer organization co-employs your staff. You direct the work. The PEO runs payroll under its own tax ID, files the taxes, and usually offers group benefits you could not buy alone. Published prices:

Justworks PEO Basic: $79 per employee a month. Payroll, compliance help, HR tools, 401(k).
Justworks PEO Plus: $124 per employee a month. Adds medical, dental and vision plans.
Remote US PEO: from $99 per employee a month.
Deel US PEO: from $125 per employee a month.

Sources: Justworks, Remote, Deel. For scale, NAPEO, the PEO trade association, says 502 PEOs serve about 233,000 businesses. Its claims about faster growth for PEO clients come from the industry itself.

Some large PEOs, such as TriNet, do not publish rates and quote by company size, industry, location and services. TriNet's page is useful anyway because it explains the three ways PEOs charge.

An HR consultant or fractional HR person

A person who works a few hours a month on your HR. Good for writing a handbook, fixing a messy setup or handling one hard case. Prices are rarely published. Ask for an hourly rate and a fixed price for defined projects.

How PEOs charge

TriNet's pricing page describes three models:

Flat fee per employee per month. The fee stays the same when someone gets a raise.
Hybrid. A flat fee for insurance plus a percentage of payroll for admin and taxes.
Bundled. One percentage of total payroll. Raises push the fee up.

In every model, benefit premiums and actual employer payroll taxes are on top. Background checks and extra training are often add-ons. Ask for onboarding fees and contract length in writing.

Say you have 12 employees. At $79 each, that is $948 a month. At $125, it is $1,500 a month. Compare that with one in-house hire. The Bureau of Labor Statistics puts US median pay for a human resources specialist at $75,940 a year in May 2025, before taxes and benefits.

When it is worth it

Outsource HR when one of these is true:

You spend several hours a month on HR paperwork or questions.
You need health benefits to hire well and cannot get good rates alone.
You hire in more than one state and each state's rules are new to you.
You are close to a federal size line.

Those size lines matter. The EEOC says Title VII and the ADA cover employers with 15 or more employees, and age discrimination law starts at 20. The Department of Labor says FMLA covers private employers with 50 or more employees in 20 or more workweeks. The IRS treats employers with 50 or more full-time employees, including equivalents, as applicable large employers under the Affordable Care Act. State laws often start lower.

It is less worth it if you have two or three staff, no benefits and simple pay. Payroll software and a good lawyer for the rare hard case may be enough.

Red flags

Lines to cut today

A price quoted only as a percentage of payroll, with no example in dollars
A long contract with a large exit fee
No clear answer on who handles a termination or a leave request
Benefits quotes that arrive only after you sign
A PEO that cannot say whether it is IRS certified

Questions to ask

HR outsourcing questions

Is this a PEO, an HR service or software with advice?
What is the monthly cost for [number] employees in [states], all in?
Which costs are on top: benefit premiums, workers' comp, onboarding, add-ons?
Who do I call for a termination or a leave request, and how fast do they reply?
Will you write or review our handbook for each state we hire in?
Are you an IRS certified PEO?
What is the contract length and the exit process?
Can I see sample benefits rates for a team like mine before I sign?