ASO payroll is payroll run by a provider under your own employer identification number. That single fact is what separates it from a co-employment arrangement, and it decides the answers to most of the questions a buyer has about liability, state accounts and what happens when the relationship ends.
Your number, your returns
In an administrative services arrangement the provider prepares and files under your identification number rather than its own. You remain the party the tax authority looks to, which means the provider's obligations to you are contractual rather than statutory. That is not worse; it is different, and it changes what you should look for in the contract, because there is no certification regime standing behind it the way there is for a certified co-employment provider.
What to check in the contract
Who prepares, who reviews and who signs; what the provider commits to on filing deadlines; and explicitly, who pays a penalty for a late or wrong filing. Providers vary widely on that last point and the marketing language does not distinguish them. Ask for it in writing, because it is the whole difference between a service with responsibility and software with support.
What leaving looks like
Simpler than leaving a co-employment arrangement, which is one of the quiet advantages. Your state accounts, your identification number and your experience rating are already yours, so you are moving a service rather than unwinding an employment structure. Confirm you receive your full pay records and filing history in a usable format, and that is largely the whole exit.
Questions people ask about aso payroll
Whose tax ID is used in ASO payroll?
Yours. The provider prepares and files under your own employer identification number, which is the defining difference from a co-employment arrangement where filings go under the provider's.
Who is liable if a filing is late?
You remain the party the tax authority looks to, so whether the provider carries the penalty is a contractual question. Ask for it in writing, because providers differ and the marketing language does not.
Is it easier to leave an ASO than a PEO?
Generally yes. Your accounts, identification number and experience rating are already yours, so you are moving a service rather than unwinding an employment structure.