Buying decision
Payroll software vs PEO
Payroll software and PEOs solve related but different problems. The right path depends on how much HR, benefits, compliance, and multi-state support you want bundled with payroll.
FactorPayroll softwarePEO
Best fitLean teams that can own HR decisionsTeams wanting bundled HR, benefits, and support
Employment modelYou remain the direct employerOften co-employment
Cost profileUsually lower base software costHigher bundled service cost
Ask before buyingState registration, SUTA setup, benefits integrationsAdmin fees, benefits pricing, contract terms, exit process
Practical recommendation
Use payroll software when you want control and lower overhead. Consider a PEO when your first hires span multiple states, you need benefits quickly, or HR compliance support is worth the added cost.