A PEO broker is an intermediary who shops the market on your behalf and is paid by the provider you end up with. That is not a scandal, it is the standard arrangement in this market and it is how a small employer gets several quotes without making the calls. It does mean the incentives are worth understanding before you rely on the shortlist.
How the money works
In almost all cases the broker is paid by the provider, usually as a share of the administrative fee, sometimes for the life of the relationship. You pay nothing directly. The practical consequence is that a broker earns more from providers that pay more and from arrangements that last, which mostly aligns with your interests and occasionally does not, particularly where one provider pays materially better than another for the same client.
How to use one well
Ask three questions at the start: which providers the broker is appointed with, whether the commission differs between them, and whether you will see the provider's quote or the broker's version of it. A broker who answers all three plainly is worth having. Ask also to be introduced to providers outside the panel if your requirements are unusual, because a panel is a business arrangement rather than a survey of the market.
When to skip the broker
If you already know you want a payroll platform rather than a co-employment arrangement, the broker adds little: those providers publish prices and sell directly. Brokers earn their keep in the part of the market that will not quote in public, which is the professional employer organisations, and that is exactly where an intermediary saves you a fortnight of calls.
Questions people ask about peo brokers
Who pays a PEO broker?
The provider, in almost every case, usually as a share of the administrative fee and sometimes for the life of the relationship. You do not pay the broker directly.
Does using a broker cost me more?
Not usually as a separate line, because the commission comes out of the provider's fee. Whether it raises the fee itself is a fair question to ask the provider directly.
Should I use a PEO broker?
They are most useful in the part of the market that publishes no prices, which is the PEOs. If you want a payroll platform with a published rate you can shop that yourself in an afternoon.