PEO workers compensation: how workers comp through a PEO works

By the HRPricing editorial teamReviewed October 18, 2026How we research and score

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PEO workers compensation means your employees are covered by the PEO's master workers' comp policy instead of one you buy yourself, with premiums billed through the PEO invoice, often with each payroll. None of the PEOs we checked publishes its rates (October 16, 2026), and some fold fees into the comp line, so ask for your rate per $100 of payroll by class code.

PEO workers compensation: workers' compensation coverage provided to a client's employees under the PEO's own policy, with the cost billed to the client through the PEO.

See Justworks pricing on Justworks’s site
On this page
  1. What PEOs say about workers' comp
  2. Example: reading the workers' comp line
  3. State rules that change the picture
  4. How to compare a PEO's workers' comp

What PEOs say about workers' comp

Workers' comp at PEOs in our research
PEOWhat the provider saysPrice shown?
Justworks (score 67)Workers' comp is required for PEO clientsNo; the $79 or $124 fee excludes it
ADP TotalSource (44)Managed and included as part of the service feeNo, quote only
Paychex PEO (34)Administration and claims; safety specialist on the master policyNo, quote only
Insperity (33)Part of direct cost allocations, with payroll taxes and benefits accessNo, quote only
BBSI (26)Payroll-based premiums with no deposits or year-end auditsNo, quote only

Sources: Justworks, ADP TotalSource, Paychex PEO, Insperity and BBSI pages, checked Oct 16, 2026. Scores from HRPricing, Oct 18, 2026.

Billing with each payroll means the premium follows actual wages, so a growing team is less likely to face a large audit bill later. See pay-as-you-go workers' comp.

Example: reading the workers' comp line

Workers' comp is priced as a rate per $100 of payroll for each class code, times your experience mod. For 10 employees earning $50,000 each ($500,000 of payroll), every $1.00 of rate costs $5,000 a year at a 1.00 mod. At an assumed $2.50 rate, that is $12,500 a year, or $1,041.67 a month, about $104.17 per employee per month: more than Justworks' $79 PEO fee.

So the comp line can outweigh the admin fee, which is why a buried fee matters. One ADP TotalSource reviewer wrote that "the admin fees are hidden in the workers comp rates" (Capterra, October 23, 2024, more than a year old), and an ADP customer described fees bundled into the admin and workers' comp lines (Trustpilot, October 1, 2026). Rates are explained in what workers' comp costs.

State rules that change the picture

  • State-fund states: coverage in North Dakota, Ohio and Washington comes from the state fund, and Wyoming covers extra-hazardous industries through its fund. Ask how the PEO covers staff there. See Ohio and Washington.
  • PEO licensing: Texas requires a PEO license from TDLR, Florida an employee leasing license and Ohio registration with the BWC. See PEOs in Texas.
  • Texas opt-out: most private Texas employers may choose not to carry workers' comp, so ask whether the PEO's policy covers your Texas staff and at what rate.

How to compare a PEO's workers' comp

  1. Ask for the rate per $100 of payroll for each class code, separate from the admin fee.
  2. Get a standalone carrier quote for the same codes and payroll.
  3. Ask whether billing is per payroll or estimated with a year-end audit.
  4. Before you leave, line up your own policy so coverage starts the day the PEO's ends.

Compare total PEO costs in PEO cost per employee and providers in the best PEOs.

Frequently asked questions

How does workers comp work with a PEO?
Your employees are covered under the PEO's master workers' comp policy. The PEO bills the premium to you, often with each payroll, based on payroll by class code. ADP TotalSource says it includes workers' comp in its service fee; Justworks requires it for PEO clients.
Is workers comp included in PEO fees?
It varies. ADP TotalSource says workers' comp is included in the service fee, while Justworks lists it as required but outside its $79 or $124 per employee PEO fee (checked October 16, 2026). Ask any PEO to show the comp rate separately.
Can I keep my own workers comp policy with a PEO?
Ask the PEO. Many cover clients under their master policy, and Justworks lists workers' comp as required for its PEO. In North Dakota, Ohio and Washington, coverage comes from the state fund either way.
Is a PEO cheaper for workers comp?
Sometimes, but none of the PEOs we checked publishes rates. Compare the PEO's rate per $100 of payroll for each class code with a standalone carrier quote. For a $500,000 payroll, each $1.00 of rate is $5,000 a year.
What happens to workers comp when I leave a PEO?
The PEO's coverage ends with your contract, so buy your own policy to start the same day. BBSI bills on payroll with no year-end audit; PEOs that bill on estimates may audit and send a final bill.
Sources (14)
  1. Justworks: Justworks pricing (checked Oct 16, 2026)
  2. ADP: ADP TotalSource PEO (checked Oct 16, 2026)
  3. Paychex: Paychex PEO (checked Oct 16, 2026)
  4. Insperity: Insperity pricing (checked Oct 16, 2026)
  5. BBSI: BBSI pricing (checked Oct 16, 2026)
  6. Capterra: ADP TotalSource reviews, page 4 (read Oct 16, 2026)
  7. Trustpilot: ADP reviews (read Oct 16, 2026)
  8. Workforce Safety & Insurance: North Dakota coverage information (checked Oct 16, 2026)
  9. Ohio Revised Code: Section 4123.01 (checked Oct 16, 2026)
  10. Washington State Legislature: RCW 51.12.020 (checked Oct 16, 2026)
  11. Wyoming Department of Workforce Services: Workers compensation for employers (checked Oct 16, 2026)
  12. Texas Department of Licensing and Regulation: PEO general information (checked Oct 16, 2026)
  13. Florida DBPR: Employee leasing companies FAQ (checked Oct 16, 2026)
  14. Ohio BWC: PEO lookup (checked Oct 16, 2026)

This page is general information, not tax, legal or accounting advice. Rules and rates change, so check the official source linked above before you file or sign a contract. Read our disclaimer.