PEO vs ASO: Which Is the Right Employee Outsourcing Solution for You?
Did you know that when you outsource your human resources tasks you can actually save your company money? If you are currently looking to outsource your own human resources department but are weighing your options between PEO vs ASO, we are here to help you.
Keep reading to learn the ins and outs of each one to decide which one is best for you.
A PEO is a firm that you can partner up with to have them manage your HR responsibilities. These responsibilities can include your payroll processing support, your worker’s compensation compliance, administration for your benefits, and hiring, onboarding, termination, and compliance guidance.
Two of the main benefits of working with a PEO is that you have HR expertise and also buying power. If you are a PEO client you will also have access to a lot more competitive pricing when it comes to insurance providers.
Something else that your current team can have peace of mind is that all human resources questions can be directed to your PEO instead of wasting time on endless questions. You can focus on addressing other business needs instead.
With a PEO you will use a shared tax ID that will become the employer of record. This model will transfer a lot of the administrative hassles of having and dealing with employees to your PEO. You will still maintain decision-making authority but the PEO will take the penalties, payroll taxes, and compliance risks.
To make sure that you are both on the same page always read over the contract that outlines the responsibilities your company has and the responsibilities the PEO has. Any reputable company like this company won’t have a problem with you reading over the contract first.
ASO on the other hand is a service model that will take care of certain HR functions but they do not operate under a co-employment model. This means that you choose specific HR tasks to outsource to an ASO but your company is still responsible for all of the legal obligations as the employer of the record.
Unlike with a PEO your tax filings, payroll, and insurance filings are still done under your own company tax ID instead of a shared tax ID. There are some ASOs that might offer to provide HR guidance but for the most part, they specialize in payroll production and similar tasks.
The pro about outsourcing to an ASO is that there are flexible options for those time-consuming tasks that your HR simply can’t manage because of all of their other responsibilities. Companies that have company-sponsored benefits find the ASO option best.
Please keep in mind that every ASO is different. This means that you have to do your research when shopping around for an ASO.
Feeling Like a PEO vs ASO Pro?
We hope that now that you know the main differences between PEO vs ASO, you can make an informed decision on which option is best for you and your needs.
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