PEO: An Alternative to Umbrella and Limited

With the off-payroll reforms coming into effect in April 2021, we understand you may be concerned about the impact on your business and contractor base. Whether your end client is looking to engage their inside IR35 contractors via an umbrella company or have specified that they are only looking to engage with a PAYE model, we are here to ensure you can take advantage of every opportunity.

To support you in the challenges that lie ahead, and to provide an alternative for when a PAYE model is specified, our PEO (Professional Employer Organisation) solution, Parasol Select, offers a straightforward PAYE-with-employment solution.

What is PEO?

A PEO is a supplier who provides a complete outsourced employment solution. Like umbrella, a contractor becomes employed by the PEO supplier who will assume all employment responsibilities including HMRC compliance.

Similar to a traditional PAYE employment model, a contractor engaged under a PEO model, is quoted their actual gross pay from the beginning of a new assignment. This will be shown on their payslip, with statutory PAYE tax deductions (tax, NI, Student Loan repayments etc) similar to what you would see with traditional employment.

Many employers prefer this model as it’s easy to understand and enables greater clarity when it comes to contractor’s take home pay.

With You All the Way

We understand that now more than ever, you need a partner that will simplify processes, keep you compliant and help you to secure your business ahead of IR35. Having worked with more than 3000 agencies and 100,000 contractors since we started over 20 years ago, you can rest assured that Parasol Select can provide you with the straight-forward, compliant PEO employment solution you need without any restrictions on capacity.

By choosing Parasol as your PEO partner, you can focus on what you do best – growing your business – leaving us to manage all your payroll, HMRC and legislative responsibilities.

Want to Know More?

We have put together a Parasol Select: Guide to PEO to help you to understand more about this model and the benefits for your agency and contractor base.

To download or request a call back with our Agency Support team, simply fill out the form on the right-hand side.

Download the guide and speak with our specialist agency sales team for more information on how Parasol Select can support you and your contractors.

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PEO Frequently Asked Questions

What does PEO mean?

The definition of PEO is Professional Employer Organisation.

Who is the employer in a PEO?

In the PEO model, the PEO supplier is the employer. They take on all the employment responsibilities and risks on behalf of the hirer.

Why use a PEO?

Using a PEO to engage your contractor clients has many benefits to you as an agency. We cover these in more detail in our ebook, but as a brief overview:

  • There is less paperwork for you, as the PEO supplier manages all timesheets and statutory payments for the contractor
  • Compliance is taken care of for you by the PEO supplier, who will manage all HMRC responsibilities
  • You will have a decreased risk as the PEO supplier is liable for all employment risk as employer