Glossary · Sales & procurement
Percent-of-Payroll Pricing
A PEO pricing model where the administrative fee is calculated as a percentage of gross payroll instead of a fixed per-employee amount.
Percent-of-payroll pricing charges the client a stated percentage (commonly 2%–10% depending on services) of total gross payroll. This model can be advantageous for low-wage workforces and disadvantageous for high-wage ones because the fee scales with compensation.
When comparing PEO quotes, percent-of-payroll proposals should be converted to a PEPM equivalent at the client's actual census. Two quotes that look identical on paper can diverge by tens of thousands of dollars annually depending on the wage distribution.
Related terms
- PEPM (Per Employee Per Month)A pricing model in which a PEO charges a fixed monthly administrative fee per worksite employee, separate from pass-through costs like benefits and taxes.
- All-In (Bundled) PricingA PEO billing approach that combines administrative fees, taxes, and certain benefits into a single bundled rate.
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.