Per Employee Per Month (PEPM)

Definition

Per Employee Per Month (PEPM) is the standard way PEOs structure pricing. A PEO PEPM bundle typically includes: the PEO admin/service fee, the workers compensation premium component, the benefits premium component (when employees enroll in PEO-provided plans), HRIS technology fees, and HR support.

PEPM ranges vary widely. Admin-only PEPM is typically $40–$160 per employee per month. All-in PEPM (including comp + benefits) typically runs $200–$400+ per employee per month depending on industry, state mix, and benefits selection.

Comparing PEOs on PEPM requires apples-to-apples scope. Some PEOs lead with low admin fees and recover costs in higher comp or benefits markups. Get every PEPM quote broken out by component (admin, comp, benefits, tech) so you can see where each provider makes their money.

Common questions about Per Employee Per Month (PEPM)

Related terms

• Professional Employer Organization (PEO) — A company that enters into a co-employment relationship with a client business to handle payroll, benefits, workers comp, and HR compliance.
• Workers compensation insurance — Insurance that pays medical expenses and lost wages for employees injured on the job, in exchange for limiting the employer's tort liability.

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This is one entry from our PEO glossary covering payroll, benefits, workers comp, HR compliance, and PEO mechanics. Browse all terms.