What Is a PEO? Co-Employment Explained

By Ryan Logan, Founder · Last updated June 23, 2026

The short answer

A PEO is a Professional Employer Organization that co-employs your staff so you can offer large-group benefits, run payroll, and stay compliant without a full HR department. Under co-employment, you keep control of hiring, firing, and day-to-day work; the PEO becomes the employer of record for payroll, benefits, and certain HR responsibilities.

Co-employment, defined

Co-employment is a contractual relationship where you and the PEO share specific employer responsibilities. You direct the work; the PEO administers payroll, benefits, and compliance.

Your employees stay your employees in every way that matters to running the business, the PEO handles the administrative weight behind them.

What the PEO handles

Payroll and payroll taxes, large-group health and ancillary benefits, workers'-comp coverage, and multi-state HR compliance and reporting.

Many PEOs also provide HR technology, onboarding, and a dedicated support team.

What you keep control of

Hiring and firing decisions, compensation, day-to-day management, company culture, and business strategy all stay with you.

What Is a PEO? Co-Employment Explained

Co-employment, defined

What the PEO handles

What you keep control of

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