What is a PEO and How Does it Work?

A Professional Employer Organization (PEO) provides HR services that help businesses manage payroll, benefits, and compliance through a co-employment model.

How Does Co-Employment Work?

Under a PEO arrangement, employees are co-employed by both:

• The client company, which retains full control over hiring decisions, compensation, performance management, and day-to-day business operations
• Remote as the PEO, which serves as the administrative partner—managing backend systems for payroll, benefits, HR compliance, and onboarding

Remote provides the underlying tooling and HR product infrastructure, while the client company drives all business and employee-facing decisions.

Core PEO Services

Remote, as the PEO, delivers:

• Payroll processing and tax filings via an integrated HR platform
• Access to group benefits plans and benefits administration
• HR compliance infrastructure and regulatory support
• Workers’ compensation policy coordination
• Tax registrations services for applicable state taxes
• Risk and document management tooling
• Systems for employee onboarding and lifecycle administration

Benefits of Using a PEO

• Centralized HR tooling across payroll, benefits, and compliance
• Access to cost-effective benefits plans typically reserved for larger employers
• Reduced administrative lift and paperwork
• Simplified multi-state compliance
• Expert support across HR and regulatory processes

See also: Understanding PEO vs. EOR: What’s the difference?

Key Requirements

See: What are the requirements to qualify for PEO services?

Note: PEO services are only available in the 50 U.S. states and are designed primarily for white-collar, professional work environments.