Most growing businesses eventually outgrow PEOs and build internal HR. The question is when. Below 50 employees, PEO is almost always cheaper than in-house HR. Above 200, in-house typically wins. The 50-200 range is the genuine decision band.
| PEO | In-house HR | |
|---|---|---|
| Cost | $200–$400 PEPM all-in | $50–250 PEPM loaded with HR salaries + broker + HRIS |
| Benefits control | PEO master plan menu | Full carrier choice + plan design |
| Compliance | PEO handles | In-house team handles |
| HR expertise | PEO advisor model | Your own team |
| Best fit size | 10–150 employees | 150+ employees |
PEO wins under 150 employees, or when you don't want HR as an in-house function.
In-house wins above 200 employees, or when you want full control over benefits design.
Plan the transition deliberately. Run both scenarios in parallel for 6 months before deciding — the in-house model takes time to mature.
PEO wins under 150 employees, or when you don't want HR as an in-house function.
In-house wins above 200 employees, or when you want full control over benefits design.
Plan the transition deliberately. Run both scenarios in parallel for 6 months before deciding — the in-house model takes time to mature.
All PEO comparison guides — every alternative we cover side-by-side.
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