A better way to pay.
PEO stands for Professional Employment Organisation and is an employment solution originating in the USA. Our PEO has been developed for the UK recruitment market based upon legislation and input from governing bodies. We’ve operated the model since 2017 paying thousands of contractors across many agencies in different sectors.
Our PEO model provides a tried and tested outsourced PAYE solution. PEO offers full supply chain transparency.
It’s a simple PAYE solution for recruitment agencies who prioritise customer satisfaction and contractor loyalty.
Are you a contractor? This way
What is a PEO?
It’s one of several payroll options available to recruiters to outsource their payroll function. Based on PAYE, and providing a partnership approach to employing workers, there are benefits for all parties.
The model originated in the USA to offer affordable private healthcare cover for smaller employers. Small companies found it hard to source affordable life and medical cover for their employees, so a PEO combined all the small companies together to form a large group organisation and then access life and medical cover at corporate rates.
People Group Services has led the way in the sector, bringing the model over to the UK and innovating and modifying it to create a solution that is perfect for the UK market.
Protect your business
Preferred by contractors
Professional Passport approved
How does it work?
There is no rocket science. To fully understand the inner workings of PEO, we recommend downloading our Guide to PEO.
However, put simply it’s outsourced PAYE with some advantageous elements for both recruitment agencies and contractors.
When using People PEO payroll the contractor gets access to a wide range of benefits and a much simpler pay slip helping to maintain trust and minimise queries right from the start. And for recruitment agencies, they reap the benefits of hassle-free payroll, less contractor enquiries, cash flow and cost efficiencies and a positive increase in brand perception.
What is the difference between Joint or Sole Employment?
Fuelled by unparalleled contractor demand and agency appreciation, PEO is our fastest growing payroll solution. Furthermore, the model can be customised to best meet the needs of agencies within the UK.
There are two main options.
People PAYE operates as the sole employer of workers, and supplies these workers to the agency. We are the intermediary between the worker and the agency. Broadly speaking the Agency’s responsibilities mirror those they perform under an Umbrella arrangement. Please see the full guide to PEO sole employment for more information.
People PAYE Limited and the Agency both jointly employ the worker and collaborate to divide the day to day responsibilities and functions. Compared to other payroll models like umbrella, workers feel a greater sense of belonging with their Agency because of the employment relationship that now exists. People PAYE are responsible for discharging all of the statutory obligations which means that the agencies can continue to focus on their core functions. Please see the full guide to PEO joint employment for more information.
The benefits of PEO
How does PEO compare?
PEO versus ‘in-house’ PAYE
In recent years we’ve seen recruitment businesses and risk-averse end clients shift away from Umbrella payroll to ‘in-house’ PAYE, particularly following 2017 Public Sector Off-payroll. While this approach does remove some of the risk, it doesn’t necessarily represent the best option when it comes to efficiencies and administration. And for some end clients in particular the need to cap headcount can sometimes leave this option redundant.
When you delve deep into all of the costs associated with running in-house payroll you begin to understand the merits of partnering with a PEO payroll expert like People Group. On average ‘in-house’ PAYE costs 2% more than People Group’s outsourced PEO option.
PEO Versus Umbrella payroll
There are plenty of similarities between PEO and Umbrella payroll. Both are based on the Pay As You Earn (PAYE) system. Both provide access to our additional benefits package. And both provide a totally compliant payroll option. However, PEO is fundamentally different when it comes to transparency. Contractors have clear and simple pay slips with deductions only for PAYE tax, employee National Insurance and an employee pension contribution. That’s it. No ENI, Apprenticeship Levy, or Employer pension.
When you factor in the potential cash flow and efficiency savings and consider the reputational damage we’ve seen with some Umbrella schemes, PEO payroll is a winner every time.