Quote Types – Bundled and Un-Bundled,
Price quotes from a Professional Employer Organization may have all the services offered “bundled” into a single rate or “un-bundled” with each individual price component broken out individually. The PEO industry has had an ongoing internal feud about which method is most effective for clients to understand. With proper analysis both methods are easy to understand. If you have questions understanding your PEO quotes, contact StaffMarket. We can explain each method.
Bundled quotes will have a single percentage amount that you will be charged for every payroll delivered to your company. Bundled quotes typically are quoted in dollars per each $100 dollars of payroll. For example, a PEO quote of $22 means that for each $100 of payroll being paid to the employees, the PEO will charge you $122. For understanding bundled PEO quotes please contact StaffMarket.
Un-bundled quotes will typically include pricing broken out in the following major categories:
Each PEO quote will "pass-through" certain costs to your company. These costs are simply billed to your company and then remitted to the appropriate taxing authority. They are collected from you and “passed-through” the PEO. This includes "pass-through" costs for FICA, FUTA and Medicare.
Workers’ Compensation Insurance – Work Comp
Unbundled PEO quotes include specific pricing for each workers’ compensation classification being used in your company. Since your StaffMarket RFP will identify the work comp codes being used in your company, PEO pricing will be broken out individually for each work comp code in use for the employees. Identification of the type of work being performed is essential to obtaining PEO quotes.
State Unemployment Taxes (SUTA) Cutoffs
Each PEO quote will list a value charged to your company to cover State Unemployment Taxes (SUTA) obligations. Since State Unemployment Taxes (SUTA) accrue based on the wages for each employee, (for state SUTA rates click here), PEO quotes will usually identify costs charged to you before and after the SUTA cutoff value has been reached. Since a PEO also handles your payroll, their payroll and billing systems are integrated and will automatically change the bill rate for SUTA when the annual wage for each employee reaches the cutoff value. Some PEO quotes may not identify a separate rate after the SUTA cutoff has been reached. In most cases where a pre-cutoff rate and a post-cutoff rate are not identified, a lower overall SUTA bill rate should be expected. Contact StaffMarket if you need help understanding SUTA pricing for your PEO quotes.
Administrative fees are charged by a PEO to cover the cost of the administrative services they deliver for your company. These fees include payroll processing, unemployment claims handling, worker’s compensation claims administration and many other services.
Each StaffMarket member PEO can provide your company with a Professional Employer Organization quote in one or more of the following forms. Contact StaffMarket if you have questions understanding your PEO quotes.