What are the differences between a PEO and an ASO? - The comparison.
PEO is an acronym for "Professional Employer Organization" and ASO is an acronym for "Administrative Service Organization".
PEO Services and Employee Leasing Basics:
PEOs as a Professional Employer Organization (PEO) contractually through a Client Service Agreement allocate and share traditional employer responsibilities and liabilities. They. assume responsibility and liability for the "business of employment," which includes risk management, human resources, improved labor compliance, payroll and employment taxes, and benefits.
PEOs acts as a co-employers. They. undertake certain employer obligations, and for many purposes is the employer of your worksite employees. As co-employers they are responsible for the payment of wages and employment taxes. All payroll taxes are filed under the PEOs' federal employer identification number. All wages are paid through the PEOs' bank account. PEOs are the employer for state unemployment tax purposes in most states. They are subject to compliance with state and federal employment discrimination laws as well as hour laws.
You run the show:
As client working through an employee leasing arrangement (PEO) you retain the responsibility for the management of employee production, business operations, marketing, sales and service. You have control over all business operations and the work that your employees.
- PEOs secure worker's compensation coverage as the employer of your worksite employees. They. manage all workmen's compensation claims.You can optionally retain your own workers compensation policy. With PEOs you only pay workers' premiums based on the wages paid and it is sometimes referred as "Pay as you go".
The PEO’s bargaining power gives smaller companies the advantage of “larger company” benefits. These plans are normally only available to larger corporations.
ASO Services and Payroll Processing Basics::
- ASOs as an Administrative Service Organizations through a Client Service Agreement, are your payroll processing agents.ASOs as payroll providers perform various services " a la carte". ASO services are the "traditional method" of processing payroll.
- The major distinction between a PEO vs ASO, under an ASO arrangement there are no employment relationships between ASOs companies and your employees.
All wages are paid through your bank account..
Under the ASO agreement all payroll taxes are filed under your federal employer identification number..
Worker's compensation coverage is provided under your policy.
- You are subject to compliance with state and federal employment discrimination laws as well as hour laws.
Employee leasing as a PEO or as an ASO are a very popular choices for owners of small- and medium-sized businesses (1 to 500 employees) who want to focus on the business, not the administrative burdens behind it. If you think these options might be right for your business, call .
Comparison - Types of Payroll Arrangements Available with an Employee Leasing company operating as PEO or ASO.
Table: Payroll Arrangement models
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