Professional Employer Organizations Revenue Benchmarks
The average professional employer organizations business in the United States generates $120.6M in annual revenue, according to the U.S. Census Bureau Statistics of U.S. Businesses (SUSB 2021). There are 2,951 professional employer organizations businesses in the U.S., employing 3,344,544 workers with an average profit margin of 8.0%. The average employee in this industry earns $72K per year (Bureau of Labor Statistics QCEW 2023).
What Does a Professional Employer Organizations Business Actually Do?
PEOs co-employ employees with client company — handling payroll, benefits, workers' comp, HR compliance. Insperity, ADP TotalSource, TriNet are major.
Who buys: Small businesses (25–200 employees) outsourcing HR admin and getting better benefits pricing.
Average Revenue
$120.6M
per year
Profit Margin
8.0%
industry average
Revenue / Employee
$106K
per year
Total Businesses
2,951
in the US
Est. Owner Income
$9.6M
small business avg
Labor Cost
70.0%
of revenue
Avg Employee Wage
$72K
per year (BLS)
Market Saturation
0.9
firms per 100K people
How Much Do Professional Employer Organizations Charge?
PEOs co-employ workforce and charge per-employee for HR/payroll/benefits/comp coverage.
| Service | Typical range |
|---|---|
PEO fee (per employee/month) | $50–200/employee/month |
OR % of payroll | 2–8% of gross payroll |
Setup fee | $500–5,000 one-time |
Ranges based on industry rate surveys and typical published pricing. Actual quotes vary by city, business size, and job complexity.
Complete professional employer organizations business plan
A 12-section data-backed business plan for a professional employer organizations business — executive summary, market analysis, competitive landscape, revenue model, 3-year financial projections, operations, marketing, staffing, funding request. Pre-populated with real Census, IRS, and BLS data on this industry. Free to view.
Cost Structure — Where Every $100 in Revenue Goes
Approximate P&L breakdown for the professional employer organizations industry. Labor share and net profit are grounded in Census SUSB and IRS SOI data. Other lines are split using sector-typical ratios.
| Category | Per $100 revenue | Per typical business | What's in it |
|---|---|---|---|
Direct service costs | $4 | $5.3M | Cleaning supplies, uniforms, equipment consumables — depends on service type. |
Wages & benefits | $70 | $84.4M | Payroll for all employees at the business (owner comp not included for small owner-operators). |
Rent & facilities | $3 | $4.0M | Rent or mortgage on business location plus utilities tied to the space. |
Marketing & advertising | $2 | $2.7M | Google/Meta ads, SEO, print, referral fees, event sponsorships. |
Other operating costs | $12 | $14.6M | Insurance, background checks, training, transportation, admin. |
Net profit | $8 | $9.6M | What remains for the owner or shareholders after all business expenses. |
Directionally accurate for a typical business in the industry. Individual businesses vary widely — a franchise may run a very different cost mix from an independent, and older established businesses often have lower labor share than newer ones.
Average Revenue by Business Size
Industry Dynamics (Census BDS 2023)
New Business Rate
12.99%
openings/year
Closure Rate
13.67%
closings/year
Net Job Growth
-3.91%
annual
Businesses Closed
2,814
in 2023
Firm Count Trend
Should You Start a Professional Employer Organizations Business?
Startup Cost
$50K – $250K
Break-Even
0 months
5-Year Survival Rate
50.0%
Related Industries
Frequently Asked Questions
- What does a professional employer organizations business do?
- PEOs co-employ employees with client company — handling payroll, benefits, workers' comp, HR compliance. Insperity, ADP TotalSource, TriNet are major. Small businesses (25–200 employees) outsourcing HR admin and getting better benefits pricing.
- How much do professional employer organizations charge?
- PEOs co-employ workforce and charge per-employee for HR/payroll/benefits/comp coverage. See the pricing table above for typical rates by service type.
- How much does the average professional employer organizations make per year?
- The average professional employer organizations business generates $120.6M in annual revenue, based on U.S. Census Bureau data (SUSB 2021). After expenses, the estimated owner profit is $9.6M per year at a 8.0% profit margin.
- How many professional employer organizations businesses are there in the US?
- There are 2,951 professional employer organizations businesses operating in the United States, employing a total of 3,344,544 workers.
- How much does it cost to start a professional employer organizations business?
- Startup costs for a professional employer organizations business typically range from $50K to $250K, with a 5-year survival rate of 50.0%.
- What is the average salary in the professional employer organizations industry?
- The average employee in the professional employer organizations industry earns $72K per year, according to Bureau of Labor Statistics data (QCEW 2023).
Industry Growth & Survival
The professional employer organizations industry is contracting — losing jobs at a net rate of 3.9% per year. More establishments are closing (13.7%) than opening (13.0%), suggesting market challenges.
Approximately 48% of professional employer organizations businesses survive their first 5 years. This is near the national average (~50%), with typical business risk. In 2023, 2,814 firms in this industry closed permanently.
Employment & Wages
The average employee in the professional employer organizations industry earns $72,075/year. This is significantly above the national average of ~$65K, reflecting the skilled nature of this work. With 20,986 establishments employing 449,947 people, the typical business has about 21 employees.
Industry Trend (2000–2023)
The professional employer organizations industry has grown 0% since 2000 (from 26,403 to 26,532 firms).
See full historical statistics →Compare Professional Employer Organizations revenue with other industries: