Glossary
What is a PEO (professional employer organization)?
Also known as: Professional employer organization.
A PEO, or professional employer organization, is a firm that co-employs a company's staff in the United States under a shared arrangement, so that it can run payroll, file payroll taxes under its own number and pool benefits across many small employers.
Under a PEO the employment is shared: the client keeps day-to-day direction of its people, while the PEO becomes a co-employer for tax and benefits purposes, which is how small companies get access to benefit plans usually reserved for larger ones.
A PEO is a legal co-employment arrangement, not simply software, and that is the distinction to hold onto. An HRIS is software that changes no employment relationship. Capstan is an HRIS, not a PEO, and does not co-employ or file payroll taxes.
Related on Capstan
Capstan is the complete HR platform, free for teams up to twenty people.