These are the cost elements of every employer's payroll system:

• The actual payroll
• The FICA and Medicare taxes on the payroll
• FUTA taxes (Federal Unemployment)
• SUTA taxes (State Unemployment)
• Clerical administrations
• Workers' Compensation Insurance

The first three are fixed - the same for you regardless of who does the payroll. The last three are variable - dependent on the individual employers unemployment claims history, internal cost of people who do payroll, and the frequency and severity of on-the-job injuries covered by the workers' compensation policy.

Thus we come to a very important point:

You cannot compare a quote for PEO services to a quote for workers' compensation insurance alone. To understand and compare the true costs, you must look at all three of the variable elements side by side.