Glossary · PEO basics
PEO (Professional Employer Organization)
A PEO is a firm that co-employs a client's workforce to deliver payroll, benefits, HR, and compliance services under a shared-employment arrangement.
A Professional Employer Organization (PEO) enters into a co-employment relationship with a client business. The client retains operational control of its employees, while the PEO assumes administrative responsibilities including payroll processing, benefits administration, workers' compensation, HR compliance, and tax filings.
PEOs typically file employment taxes under their own FEIN, allowing small and mid-sized employers to access Fortune-500-grade benefits and shared compliance infrastructure they could not procure alone. The IRS recognizes Certified PEOs (CPEOs) under a separate framework that carries explicit tax-liability assurances for clients.
Related terms
- Co-employmentA contractual arrangement in which two entities — typically a PEO and its client — share legal and operational responsibilities for the same workforce.
- CPEO (Certified PEO)A PEO certified by the IRS under the Small Business Efficiency Act, providing client businesses explicit federal employment-tax liability assurance.
- ASO (Administrative Services Organization)A service model that handles HR, payroll, and benefits administration without entering a co-employment relationship.
- Worksite EmployeeAn employee who works at the client's premises under the client's direction but is co-employed by the PEO for tax and benefits purposes.
Trusted by operators across the PEO ecosystem
Ready when you are
See Entravia handle a real intake.
Walk through a live submission, structured data, and parallel quote distribution — in about 15 minutes.