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Home » What is PEO » Save with a PEO


Business owners save valuable time and hard cash when hiring a PEO. Each client situation differs. Tandem HR representatives are available to review your business and human resource needs to determine exactly where we can save your business time and money.

Two Tandem clients show the financial difference our PEO has made for their business:

Example #1:
Stock Trading Firm
15 Lives, $450,000 annual payroll

In this instance, the client saved 25% in health care costs, which allowed it to offer pre-tax plans and a 401(k) to its staff. The Management Fee listed in the "Before PEO" column represents the client's calculation of costs associated with these functions before hiring the PEO.

Bottom line: this company improved its employee benefits, gave up the headaches, and saves about $10,000 annually.

COSTS BEFORE PEO AFTER PEO
 
Health Insurance Annual $40,000 $30,000
Dental Insurance Annual $6,500 $5,400
Workers' Comp Annual $1,250 $700
Employer FICA $34,425 $34,425
Employer SUTA $4,185 $4,185
Employer FUTA $840 $840
Pre-Tax Plans NO YES
401(k) NO YES
Management Fee $16,000 $18,000
Total Annual Cost $103,200 $93,550

 



Example #2:

Trophy Manufacturer
70 Lives, $2,100,000 annual payroll

In this case, the company's cash outlay is roughly the same, but all of the administration associated with payroll, benefits, risk management, unemployment, and workers' comp are now handled by Tandem.

COSTS BEFORE PEO AFTER PEO
 
Health Insurance Annual $190,000 $156,000
Dental Insurance Annual $30,000 $25,200
Workers' Comp Annual $15,000 $9,000
Employer FICA $160,650 $160,650
Employer SUTA $15,750 $15,750
Employer FUTA $3,920 $3,920
Pre-Tax Plans NO YES
401(k) $3,000 YES, $0
Management Fee $40,000 $84,000
Total Annual Cost $458,320 $454,520

 

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