PEO in Ohio [2024]

A professional employer organization (PEO) takes on administrative HR duties—like payroll processing, tax registration, and compliance with employment laws—on a company’s behalf. By co-employing a company’s workforce, the PEO company can also provide small and medium-sized businesses access to benefits they might not otherwise be able to secure on their own. 

If you lead a small business in Ohio or employ remote workers in the Buckeye State, joining a PEO can save your human resources team time and money. It can also spare you the stress of handling Ohio’s state income taxes and, in some areas, local school district taxes—all while complying with state-specific guidelines for unemployment and workers’ compensation insurance. 

But amid all your PEO options, which works best for your company? This guide will help you evaluate PEOs and select one that’s right for your business. Rippling PEO, for instance, makes it easy to hire, onboard, and manage your Ohio-based workforce by automatically registering employees for taxes, distributing laptops to new remote workers, and much more.

Benefits of using a PEO in Ohio

Using an Ohio PEO service can free up time and lead to big cost savings for small to mid-size businesses. Here’s a look at the perks in more detail.

Offload administrative HR work

PEOs co-employ your workforce, meaning your company and the third-party PEO divvy up employee-related responsibilities. Under this type of co-employment relationship, your company remains the worksite employer, with full authority over personnel decisions, salaries, and all core business operations from sales to research and development.

The PEO, in turn, becomes your trusted administrative employer who employs your workers under their federal tax identification number (EIN), thus handling payroll, tax registration, benefits administration, compliance, and other employment-related HR tasks on your behalf. In Ohio, for instance, PEOs are regulated by the state’s code, which says they assume the responsibility for workers’ compensation claims and premium payments. 

Outsourcing your administrative burden to a PEO takes time-consuming administrative work off your plate, allowing your HR team to focus on more strategic projects, like growing your company. In fact, PEO clients have up to 9% faster growth rates than average small businesses, according to the National Association of Professional Employer Organizations (NAPEO). 

Better employee benefits, at a lower price

Since PEOs “employ” so many people at once—4.5 million workers across 200,000 businesses, according to the NAPEO—they create economies of scale and can bargain for more affordable benefits packages with third-party vendors. They can also help small business owners offer access to comprehensive plans otherwise only available to bigger companies, including robust health insurance (with dental, vision, and mental health coverage), disability, retirement, and other perks like meal and commuter stipends. 

Worry-free compliance with Ohio laws

Adhering to federal employment laws in addition to Ohio’s state laws can be tricky, especially if your workers live in different places. Ohio, for instance, imposes a progressive state income tax along with a local school district tax administered by the Columbus-based Ohio Department of Taxation. Some Ohio employees have to pay this municipal tax to fund public schools, while others don’t. The state also requires most employers to contribute to their own unemployment insurance schemes. 

A PEO can help ensure compliance with various laws, relieving your HR team of the headaches that come from combing through every regulation in every place you hire. Rippling, for instance, automatically flags compliance issues like wage violations, ensuring employers are aware of Ohio’s minimum wage changes—the minimum wage rose to $10.45 an hour in January 2024, putting it at $3.25 above the federal minimum.

PEOs also offer reliable compliance support for:

• Payroll: Register and file for Ohio’s payroll taxes, make the right withholdings, and pay the correct agencies on time.
• Benefits: Stay on top of federal healthcare requirements for the Affordable Care Act, COBRA, FSA, and HSA, along with Ohio’s state unemployment insurance rates.
• Employment laws: Provide workers' comp coverage, follow Equal Employment Opportunity (EEO) requirements, and correctly classify workers.

Compliance penalties can be steep. Misclassifying an employee as an independent contractor, for instance, can incur millions in fines and leave employers on the hook for retroactively administering benefits. And according to the IRS, 40% of small businesses pay payroll penalties annually. PEOs can help you avoid any costly slip-ups.

Dedicated support team

In addition to handling administrative tasks on your company’s behalf and reducing compliance risks, PEOs can advise on everything HR-related whenever your team has questions. They are, after all, experts. Whether you need help with tax filing paperwork or have questions about workplace posters, Occupational Health and Safety Administration (OSHA) guidelines, or crafting employee handbooks, PEOs can provide support—all while staying on top of local laws and regulations.

What to consider when evaluating a PEO service in Ohio

With hundreds of service providers to choose from in Ohio, bear the following in mind when considering the best PEO for your company:

• Your HR needs. The PEO should be equipped to handle the current size of your workforce, your future growth plans, and the HR functions your company could use a hand with, including:
• Payroll processing
• Tax registration and filing
• Compliance and risk management
• Benefits administration
• Recruiting and onboarding
• Time and attendance tracking
• Your budget. PEOs come with different pricing structures. The two most common are monthly fees per employee and fees based on a percentage of your payroll. Since PEOs get pricier as your headcount grows, consider your plans to scale. 
• Experience and reputation. Consult your network of HR professionals and check out review sites like G2 and Capterra to see if a PEO’s clients are satisfied with the product. Make sure the PEO has experience working with Ohio-based businesses, too. 
• Benefits. Figure out which specific benefits packages the PEO can help you access, their price ranges, and whether they suit your workforce. 
• Benefits renewal rates. Some PEO providers offer an initial rate only to hike up their price the following year, leaving companies scrambling for a more affordable option. Look for companies that are transparent about how renewal rates will change over time, and watch out for steep price hikes. 
• Integrations. PEOs can be more efficient if they sync with collaboration tools and systems you already use. Look for options that integrate with your tech stack for a more seamless experience.
• Does the PEO specialize in certain industries? Some PEOs are tailored to specific industries, like staffing or construction. Research whether your industry uses a specialized PEO option.
• Does the PEO specialize in certain legal or compliance issues? Your business may have certain state or industry-specific legal needs. It may also need help adhering to relevant statutes in the Ohio Revised Code. See whether a PEO meets those needs, or whether it offers more generalized compliance support. 
• Your exit strategy. If your company grows to the point where moving off a PEO makes more financial sense, you’ll need to find a new solution or bring all your HR functions in-house. Some PEOs make the transition a pain. Look for PEO options that let you move on and off with minimal disruption.

Why Rippling PEO is the right choice for your Ohio business

Rippling PEO is the first PEO to combine HR, IT, and Finance into a single platform. Our modern, easy-to-use software automates your cumbersome busy work; you can onboard new hires in 90 seconds and immediately configure and ship their new laptops. 

You also won’t need to fret over compliance mishaps. We register state and local tax accounts, automatically flag wage and overtime violations, and help you access Fortune 500-quality benefits at affordable costs. 

With Rippling, you get:

• An all-in-one HR, IT, and Finance solution
• Customizable reporting on employee data that you can easily share with your team
• Tools for managing remote teams, including state and local tax registration, remote I-9 verification, and seamless app provisioning
• Access to premier benefits packages with below-average renewal rates
• Automatic monitoring of compliance infractions, with recommended courses of action on how to fix them
• Trusted expertise handling workers’ compensation claims, ACA and COBRA administration, digital labor law poster distribution, and updates to federal, state, and local tax rates
• Full access to hundreds of HR resources, guides, and templates—like an employee handbook builder and performance review tools 

With Rippling, you can transition away from the PEO at any time with ease. All your systems, integrations, and logins remain intact when moving off the PEO and onto our all-in-one workforce management platform.

FAQs about PEOs in Ohio

What is a PEO, and how does it work?

A PEO is a firm companies partner with to split HR responsibilities. PEOs co-employ your workforce and are typically responsible for administrative functions like processing payroll, registering tax accounts, providing access to benefits, and managing compliance with federal, state, and local guidelines. Your company retains authority over core business processes and any strategic decisions. 

What is a Certified PEO?

A Certified PEO (CPEO) abides by IRS guidelines concerning its background, expertise, finances, and reporting. Certification isn’t mandatory and doesn’t mean the IRS recommends that PEO; it just means it fulfilled certain criteria. While being certified used to allow PEOs to grant tax benefits to businesses, most of those advantages are no longer available. 

What size company can benefit from a PEO?

Companies of all sizes can join a PEO, but small to mid-sized businesses typically get the most out of its offerings.

How does an Ohio PEO charge for its services?

The two most common pricing structures for a PEO are a monthly fee per employee or a specified percentage of the total payroll. Some providers also charge startup fees. 

Are PEOs regulated?

Yes. PEOs are subject to both federal and state regulations. In the State of Ohio, they’re covered by the Revised Code. They may also seek additional industry-specific accreditations. 

How can I learn more about PEOs in Ohio?

NAPEO has an Ohio Leadership Council that conducts regular conference call meetings to discuss the state’s new policies and government affairs. For more information, visit the NAPEO website. 

What happens if I want to terminate my relationship with a PEO?

If you want to end your partnership with a PEO, you typically have to seek brand new systems to process payroll, administer benefits, register for taxes, and manage employees—not to mention ripping out the old system first. With Rippling PEO, switching off the PEO is easy. You can transition to our all-in-one workforce management platform, which keeps all your tried-and-true systems, data, and integrations in place.

In what states is Rippling PEO available?

Rippling PEO is available nationwide.

Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.