Warp vs PEO

A Professional Employer Organization (PEO) is a co-employer that handles payroll, taxes, and benefits under their EIN. PEOs made sense when compliance was impossible to automate and small businesses couldn't access affordable benefits. Today, modern payroll platforms like Warp deliver the same compliance outcomes—automated multi-state tax filings, benefits administration, HR management—without the co-employment, loss of control, or percentage-of-payroll fees. Most startups with under 50 employees don't need a PEO.

Warp's AI compliance engine—built by engineers from MIT, Palantir, Ramp, and Dropbox—automates state registrations, tax filings, and notice resolution end-to-end. Federal, state, and local payroll taxes are filed automatically under your EIN, not a third party's. NY DBL/PFL, CA SDI, SF PPLO, and complex state requirements are all handled with full transparency. You get the same (or better) compliance outcomes as a PEO, with complete visibility and control.

Companies typically outgrow PEOs around 25-50 employees. Key signals: costs are spiraling (percentage-of-payroll fees compound as you grow), you want more benefits flexibility than the PEO's pooled plans allow, you're eligible for large-group insurance (50+ employees), or you need control over your HR data and processes. If you have a dedicated HR person and want to own your compliance, it's time to move on.

You lose access to the PEO's group health plan, but you have better options. Warp is a nationally licensed brokerage supporting traditional small group insurance, ICHRA (for budget predictability), QSEHRA, and large-group insurance for companies with 50+ employees. We work with 30+ carriers including Oscar, Guardian, Aetna, United Healthcare, and Blue Cross Blue Shield. Most companies find they save money and get better flexibility after leaving their PEO. Employees get a 60-day special enrollment period triggered by loss of PEO coverage.

Automatically. Warp handles NY Disability Benefits Law (DBL), Paid Family Leave (PFL), CA State Disability Insurance (SDI), and San Francisco's Paid Parental Leave Ordinance (PPLO)—all filed under your EIN with full transparency. No co-employment required. Unlike PEOs where these filings happen under their accounts with limited visibility, Warp gives you complete control and audit trails.

PEOs typically charge 3-15% of your total payroll. Warp costs $35/employee/month flat—every feature included. For a 20-employee startup with $100K average salaries, that's $8,400/year with Warp versus $60,000-$300,000/year with a typical PEO. Companies switching to Warp save 20-30% or more, and the savings grow as your team and payroll grow.

Most companies complete the switch in 1-2 weeks. Warp handles the entire migration free—employee data, tax account setup, benefits coordination, and onboarding. We recommend starting the planning process 8-12 weeks before your PEO exit date to allow for benefits transition and employee communication. Our dedicated Account Manager guides you through every step.

Yes. Many companies switch despite contracts when the switching cost is lower than staying. Warp offers free migration and month-to-month pricing—no lock-in. We've helped many companies navigate PEO exits and can help time the transition with your contract end date or explore early termination options.

Night and day. PEO support typically means calling an 1-800 number and getting routed to whoever is available. Warp publishes live support stats—1-minute median response time, 5/5 CSAT score. You get direct access to US-based experts via live chat, Slack, phone, and video. Every company gets a dedicated Account Manager and Benefits Advisor, not a rotating cast of reps.