When is the Best Time To Switch to a PEO?
Whether you’re a company looking to engage in a PEO contract for the first time, or a company that already works with a PEO but is looking to make a switch, timing is everything!
It is a common misunderstanding that PEO contracts need to begin on January 1. If companies wait for the next calendar year, they could waste months overpaying for services, experiencing dissatisfaction, or outgrowing a vendor.
However there are a few red flags that are worth paying attention to, so that money is not lost or wasted when making a switch. Here are just a few:
- Payroll Tax Restarts: You must be careful to avoid payroll tax restarts. Sometimes the amount of money put toward State Unemployment, Social Security, Medicare, and other taxes to date can be forfeited.
- Health Insurance: With a health insurance switch, the amount of deductible that employees have paid to date with another health insurance provider can be forfeited. While this won’t necessarily be an upset for you as the business owner, but it may result in several disgruntled employees!
- Anything Paid in Advance or Deposits Made: Did you make a deposit on workers compensation insurance? Do you pay any insurance premiums one month in advance? These are important things to look at so that you don’t have an overlap of services (or costs) when starting with a new provider.
While the above mentioned items are worth paying attention to, they aren’t worth scaring you away from a new PEO contract. Did you know that some PEOs offer credits for taxes already paid? That’s right, even if you have put money toward SUTA or other taxes, you can be “reimbursed” by your new PEO. Employer Solutions Plus can identify the most convenient (but also the most cost-effective) time frame for making the switch! Need some help? Contact us today!