Payroll leasing company

Advertised prices, verified

How a payroll leasing arrangement works

1. The leasing company becomes the payroll employer. The worker moves onto the leasing company's payroll. Depending on the product underneath the label, that company becomes either the co-employer alongside your entity or the sole legal employer, and that difference decides whose name is on the employment contract.
2. Wages, withholding and filings run through the lessor. Each pay cycle the leasing company pays the worker, withholds the required taxes and social contributions, files the returns under its arrangements and administers any benefits included in the deal. You receive a consolidated invoice for wage costs plus the service fee.
3. You direct the work. Day-to-day supervision, targets and the decision to end the engagement stay with you. The leasing company carries the payroll administration and, depending on the structure, some or all of the employer compliance duties; the split should be written into the service agreement, not assumed.

Leasing, PEO, EOR: which one are you being sold?

Ask one question of any payroll leasing company: does this arrangement require me to have my own legal entity where the worker is? If yes, the product is co-employment in the PEO family, and you remain an employer with your own registrations and obligations alongside theirs. If no, the product is an employer of record, and the leasing company or its local entity is the only employer the law sees. The word leasing appears in marketing for both, and the two carry different risk, different pricing and different exit paths.

In the United States the leasing label carries history worth knowing: staff leasing was the industry's original name, and the sector's early reputation problems around unpaid payroll taxes are exactly why certification and registration regimes now exist. A modern buyer should treat the label as a prompt to check registrations, not as a product category in itself.

What a payroll leasing company should cost

Pricing follows the structure. Co-employment arrangements are usually priced per employee per month or as a share of payroll, and employer-of-record arrangements as a flat monthly fee per employee, with the vendors in this index that publish a price advertising figures shown in the table above. In both cases the fee sits on top of the full cost of employing the worker: salary, employer taxes and mandatory benefits pass through to you at cost.

The comparison worth making is not leasing fee against leasing fee but the total arrangement against its alternative: running the payroll yourself with software and an accountant if you have an entity, or an EOR if you do not. A leasing fee buys administration and some liability transfer; how much of each is in the contract, and the contract is what to read before the price list.

Common questions

Is a payroll leasing company the same as a PEO?

Often, but not always. Staff leasing is the older name for what became the PEO industry in the United States, and many firms still using the leasing label sell co-employment. Some sell sole-employer arrangements instead, which is the employer of record model. The contract, not the label, tells you which.

Who is the legal employer under payroll leasing?

It depends on the structure. In a co-employment arrangement you and the leasing company share employer responsibilities and you keep your own entity. In an employer of record arrangement the provider is the sole legal employer. The service agreement should state this in plain terms; if it does not, ask before signing.

Does leasing my payroll remove my tax liability?

Usually not by itself. In most third-party payroll arrangements the client business remains responsible if taxes go unpaid, with narrow exceptions that depend on the provider's certifications in your country. Verify what the provider is registered or certified as, and get the liability split in writing. Nothing here is tax advice; the agreement and the tax authority's rules control.

Coverage by country

• Employer of record vendors covering Singapore
• Employer of record vendors covering Mexico
• Employer of record vendors covering Spain
• Employer of record vendors covering Colombia
• Employer of record vendors covering United Kingdom
• Employer of record vendors covering France
• Employer of record vendors covering Hungary
• Employer of record vendors covering New Zealand