An ASO HR arrangement is the middle seat: more than a payroll bureau, less than co-employment. The provider runs your HR and payroll administration and you remain the sole employer, with your own tax identification number and your own benefits. For employers who want the workload gone but not the employment relationship changed, it is frequently the right answer and the least discussed.
What it covers in practice
Payroll processing and filings under your own identification number, starter and leaver administration, records and reporting, benefits administration against the plans you already hold, and usually handbook and policy support. What it does not include is the provider's own benefit plans or workers' compensation programme, because those come with co-employment and this is not that.
Who it suits
An employer who already has benefits they are happy with, or who is large enough to buy sensible group cover directly, and whose actual complaint is administrative load. It also suits owners who do not want a third party appearing as an employer on their staff's paperwork, which matters to more people than the industry expects.
How to price it against the alternatives
Against a payroll bureau, ask what the extra fee buys beyond the pay run and whether you will use it. Against a PEO, ask what your current benefits and workers' compensation actually cost you, because that is the number the co-employment route has to beat. An ASO that costs nearly as much as a PEO while giving you none of the benefits pooling is the worst of the three, and it happens.
Questions people ask about aso hr
What does an ASO do in HR?
Runs payroll and HR administration under your own tax identification number, handles starters, leavers, records and reporting, and administers the benefits you already hold. You remain the sole employer.
How is ASO HR different from a PEO?
No co-employment. Your staff stay yours alone, filings go under your number, and your benefits are unchanged. A PEO changes all three, which is how it can offer its own benefit plans.
When is an ASO the right choice?
When your benefits are fine and the problem is administrative load, or when you do not want another party appearing as an employer on your staff's paperwork.