Professional Employer Organization (PEO) in United States

What is a PEO?

Professional employer organizations provide outsourced HR services. They help businesses with a variety of HR functions, including payroll, benefits, compliance, and more.

With a PEO by its side, your business can navigate the challenges of hiring in new countries, including the US. You don’t need to be headquartered in or even have an office there. All you need is the right talent and a great PEO partner to make global hiring a success.

With the boom of remote working, every company can look beyond their own country’s talent pool. Speak to Skuad today to start building your global team.

What are the benefits of using a PEO provider in the United States?

We touched on some of the workflows a PEO in the US can help with, but what impact can that bring to an organization?

Attract and retain top talent

Employee benefits are big business in the USA. 78% of American employees are more likely to stay with a company that offers a great benefits package. Being happy and healthy also helps US employees work harder and stay more engaged.

PEOs can provide a full suite of benefits and services that help to attract and retain top talent. This includes health insurance, retirement plans, workers' compensation, and other employee benefits. 

PEOs can also help with payroll and tax compliance, taking the complicated task of multi-country management off your existing in-house team.

Expand your business into new markets

PEOs are experts in global expansion and have the knowledge and expertise to help you expand your business into new markets, whether those markets are in the United States or internationally. PEOs can help you successfully expand your business, by:

• Assisting with the set-up of your expansion operations
• Obtaining the necessary licenses and permits
• Hiring and training employees
• Managing payroll and benefits.

Save on unnecessary costs

PEO services in the US can help reduce employer costs in several ways. For example, Skuad can:

• Negotiate better rates for health insurance and other benefits
• Help with employee recruitment and retention
• Provide human resources support
• Offer payroll and tax processing services
• Comply with government regulations (and help you avoid fines!)

Become a globally competitive business

Having a global team shows the world that you’re a successful business; diversity helps attract top talent and having a diverse team will promote productivity and engagement, too.

A PEO that operates in the United States will know how to negotiate contracts in line with local expectations, set up bank accounts, and secure any further paperwork. It’s the easiest way to put global expansion on autopilot.

Want to know more about how it all works? Get in touch today and we’d be more than happy to answer any questions. 

Develop your understanding of new, exciting markets

Remember how we said that the USA is the world’s largest economy? Hiring bona fide American workers is the best way to better understand this world-leading nation. 

If you’re thinking about offering your products or services to a US audience — or have done so already — then the insights you could learn from US staff would be of very high value indeed.

Avoid setting up your own legal entity in the US

Setting up a business in the US can be a costly and time-consuming process. You will also need to comply with employment laws, which can be complicated and expensive.

A PEO can help you overcome these challenges by acting as your employer of record (EOR) in the United States. We will take care of setting up a legal entity on your behalf and we will also handle payroll, compliance, and benefits. 

Using Skuad is the simplest and most cost-effective way to expand your business into the US market, so start the process today!

Learn ways of doing business in the United States

The US has a very diverse population and it’s essential for every business to respect its melting pot of cultures. It wouldn’t be unusual to have one team member requiring time off for Passover and other for Easter.

Don’t worry, though, your PEO partner can show you the way. They’ll also be the ones to tell you that Americans are very direct when communicating and expect others to do the same!

Ensure that your business complies with statutory requirements in the United States

When it comes to doing business in the United States, a PEO can help you set up quickly, easily, and with less risk than going it alone.

When you use a PEO, you outsource the HR function to them. They will also help you to navigate the complicated US legal system so that you can recruit or get your employees working in the USA as quickly as possible.

If you are looking to outsource your payroll in the United States, it is important to ensure that your business complies with statutory requirements. This includes ensuring that taxes are correctly deducted from employee wages and that the correct amount of money is paid to the relevant government agencies.

Some specifics you need to know when hiring in the United States include:

Payroll

• Payroll is processed weekly, bi-weekly or monthly
• Employees are typically paid in U.S. dollars (USD / $)
• Staff usually work between 40 and 50 hours per week
• Health insurance and other benefits are often offered through an employer-sponsored plan
• Many employers offer bonuses as an incentive for employees to stay with the company for a long time
• Severance pay is often provided to employees who are laid off or let go from their position.

Leave

• There are no federal laws regulating how much vacation time employers must give their employees, so it is up to the employer to decide
• The standard vacation entitlement for US employees is two weeks per year — though some employers offer more generous vacation packages
• Some states have their own laws regarding vacation entitlements
• There is no federal law in the US regulating paid sick days, so it is up to the employer to decide whether to offer it. Some states and cities have their own laws regarding paid sick days, but US employers usually offer between five and seven days of paid sick leave per year
• There is no federally mandated maternity leave in the US, but some states have their own laws regarding it. If an employee is eligible, it is usually 12 weeks. If not eligible, they can claim 12 weeks of unpaid leave.
• There is no federal law in the US regulating paternity leave but employers usually offer between two and four weeks of paid paternity leave.

Taxes

The United States has a progressive income tax system — essentially, people with higher incomes pay higher taxes. The federal government also imposes a tax on the taxable income of individuals, corporations, trusts, and estates.

The United States income tax rates for 2022 for taxes due in April 2023 are:

• 10%: $0 to $10,275
• 12%: $10,276 to $41,775
• 22%: $41,776 to $89,075
• 24%: $89,076 to $170,050
• 32%: $170,051 to $215,950
• 35%: $215,951 to $539,900
• 37%: $539,901 or more

All workers in the United States — and their employers — contribute a part of their income to Social Security and Medicare. The rates are:

• Social Security: 6.2% for employees and 6.2% for employers
• Medicare: 1.45% for employees and 1.45% for employers.

The United States corporate tax rate is 21%, though there is a government proposal to raise this to 28%.

Don’t lose time learning the ins-and-outs of US tax and compliance. Book a Skuad a demo today and we’ll take over the reins.

What does it cost to build a team in the United States?

Organizations have two options when it comes to hiring in the United States.

Setting up a business in the US

The cost of US company incorporation depends on several factors, including the state in which you incorporate and the type of business you are starting. As a foreign entity, you could be facing a bill of up to $7,500, plus hefty account filing fees every year afterward.

Not only will you need to decide which state to incorporate in, but you will also need the necessary paperwork to file with the Secretary of State. After your United States company registration is complete, you will need an Employer Identification Number (EIN) from the IRS (Internal Revenue Service) and open a business bank account.

This process can take up to three months, or you could partner with a reputable PEO provider in the United States. 

PEO in the US

The cost of PEO services in the United States varies depending on the size and scope of your business.

Generally, PEO providers charge a monthly fee plus a per-employee fee. This fee covers the costs of HR administration, payroll, benefits, and workers' compensation.

With Skuad, you can get started for free and then cancel at any time. Our platform allows you to onboard and pay employees starting from just $19 USD per employee per month. We also offer employer of record (EOR) services, where we hire international employees on your behalf as well as manage payroll, benefits, and compliance, starting from $199 per month.

Need something a bit more specific? Let's work together to come up with tailor-made solutions for global enterprises, with custom pricing that's fair for everyone involved.

Want to book in for a demo?

If you’re ready to start growing your business in the United States, book in for a demo of Skuad’s global PEO solution right away.