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Justworks vs. Managed Payroll: PEO Bundling vs. Standalone Service
Justworks bundles payroll into a PEO package with benefits. If you need the benefits bundle, Justworks may make sense. If you already have benefits and just want payroll handled, you're paying a PEO premium for services you don't need.
Justworks has built a strong brand in the SMB HR and payroll space. It's modern, well-designed, and genuinely useful for specific companies at specific stages. The founders behind it understood that early-stage businesses need access to benefits they can't afford independently, and Justworks' PEO structure addresses that problem effectively.
But Justworks is a PEO. If you need payroll handled and you already have benefits sorted, buying Justworks is buying a bundle you don't need at a price that reflects what the bundle costs. This comparison is designed to help you think clearly about what you're actually evaluating.
What Justworks Is (and Is Not)
Justworks is a PEO - a Professional Employer Organization. This means:
- Your employees enter into a co-employment relationship with Justworks when you sign up
- Justworks becomes a co-employer of record, which means they have a legal employer relationship with your workforce
- Benefits you offer through Justworks are administered through Justworks' group plans, not plans you control independently
- You cannot use Justworks for payroll without accepting the PEO co-employment structure
Justworks is not a standalone payroll service. You cannot engage Justworks purely to process payroll without the PEO structure attached. The payroll function is embedded in the PEO.
BEG managed payroll is a standalone payroll service. There is no co-employment, no benefits lock-in, and no PEO structure. BEG handles payroll processing, tax filing, compliance monitoring, and year-end forms for your existing employees under your existing employment structure, at $25 to $45 per employee per month.
| Factor | Justworks (PEO) | BEG Managed Payroll |
|---|---|---|
| Model | PEO - co-employment required | Standalone managed service - no co-employment |
| Monthly cost per employee | $59–$99+/employee (payroll + HR + benefits access) | $25–$45/employee (payroll + compliance, all-in) |
| Benefits bundling | Required - Justworks group plans | Not required - keep your own benefits |
| Who is the legal employer | Justworks is co-employer | You remain sole employer |
| Implementation speed | Weeks (co-employment setup + benefits onboarding) | 3–5 business days |
| Benefits lock-in | Yes - migrating benefits required on exit | No - your benefits are unaffected |
| HR software platform | Included in Justworks plan | Not included (payroll only) |
| Multi-state compliance | Handled by Justworks | Handled by BEG |
| Exit complexity | High - PEO unwind + benefits migration | Low - standard vendor transition |
| Works in your existing system | No - must use Justworks platform | Yes - BEG can work in your system |
Where Justworks Delivers Real Value
Justworks is not a bad product. For the right company at the right stage, it does exactly what it's designed to do:
- Benefits access for small employers. A 10-person company can't access large-group health insurance rates on its own. Justworks' pooled buying power means small employers can offer competitive benefits. If this is the gap you're solving, PEO bundling has real value.
- Startup HR infrastructure without an HR hire. Early-stage companies that need payroll, benefits, compliance, and basic HR tools without building those capabilities internally can get a lot of that under one Justworks contract.
- Employee experience and self-service. Justworks has a well-designed employee portal. If a polished employee self-service experience matters for your talent brand, Justworks invests heavily in this.
- Fast path to offering benefits. If you've just closed a round and need to stand up competitive benefits quickly to win engineering talent, Justworks can do this faster than building your own benefits infrastructure.
These are legitimate advantages. The question is whether these advantages are relevant to your situation.
Where the Premium Stops Making Sense
Justworks' per-employee pricing makes sense when you're buying the full bundle. When you already have the bundle's components solved, you're paying for things you don't need.
If your company has:
- A benefits broker and a health plan you're happy with
- An HR platform or HRIS you already use
- No concern about access to large-group rates (because your headcount gets you there independently, or your industry has better options)
Then the Justworks bundle is charging you $59 to $99 per employee per month for payroll - when standalone managed payroll handles the same payroll function for $25 to $45 per employee per month without touching your benefits or your employment structure.
At 50 employees, that difference is $14,400 to $36,000 per year. That's the cost of the bundled services you already have covered elsewhere.
Already have benefits covered and just need payroll handled?
In 15 minutes we can look at your current setup and tell you whether managed payroll at $25 to $45 PEPM makes more sense than what you're evaluating. Straight numbers, no pitch.
The True Cost Comparison
The cost comparison between Justworks and managed payroll depends on what you're actually buying from Justworks.
| Cost factor (50 employees) | Justworks Plus Plan | BEG Managed Payroll |
|---|---|---|
| Monthly platform fee | ~$4,950–$5,000/mo (at $99/ee) | $1,250–$2,250/mo (at $25–$45/ee) |
| Annual platform cost | ~$59,400–$60,000/yr | $15,000–$27,000/yr |
| Benefits premiums (separate) | Paid to Justworks for group plans | Paid to your own broker/carrier |
| Co-employment | Yes - required | No |
| Benefits lock-in risk | Yes - exit requires benefits migration | None |
| Savings vs. Justworks Plus | N/A | $32,400–$45,000/yr (platform fee only) |
Note: Health insurance premiums are separate from both Justworks' platform fee and BEG's managed payroll fee. The comparison above reflects platform cost only. If you stay on Justworks for benefits access, the premium comparison shifts based on whether Justworks' group rates are meaningfully better than what you could get independently.
Switching from Justworks to Managed Payroll
Companies leave Justworks for different reasons: growing past the headcount where PEO rates are advantageous, acquiring a benefits broker relationship that makes Justworks' rates less compelling, frustration with Justworks' platform or customer service, or simply wanting to reduce the PEO premium once the startup phase is behind them.
A Justworks exit has two distinct components:
- Benefits transition. Any benefits administered through Justworks group plans - medical, dental, vision, 401(k) - must be transitioned to plans you control or a new broker relationship. This is the most complex part of exiting a PEO and should be coordinated with the benefits renewal date to avoid coverage gaps.
- Co-employment unwind and payroll transition. The Justworks co-employment structure must be formally closed. Your employees are re-onboarded as solely your employees. Payroll is transitioned to the new managed service.
The payroll transition to BEG typically takes 3 to 5 business days once the co-employment structure is unwound. The benefits component determines the overall timeline, typically 60 to 90 days from decision to completion. Planning the exit 90 days before a renewal date gives the cleanest transition window.
What BEG Managed Payroll Includes vs. Justworks
BEG managed payroll does not include an HR software platform, benefits administration, or HR advisory services. It does include:
- Full payroll processing every pay cycle
- Federal, state, and local tax filing for all 50 states
- Multi-state compliance monitoring and updates
- Year-end W-2 preparation and distribution
- A dedicated BEG contact (not a support queue)
- Employee pay question handling
- Industry-specific payroll configuration (shift differentials, tip credit, certified payroll, grant allocation)
- Works in your existing payroll system - no platform migration required
If you have an HRIS, benefits broker, and HR function already in place, BEG adds the missing piece - fully managed payroll execution - at a flat rate without restructuring anything else.
Frequently Asked Questions
What is the Justworks PEO and how does it work?
Justworks is a Professional Employer Organization (PEO) that provides payroll, benefits administration, HR compliance, and employee access to benefits plans through a co-employment arrangement. When you sign up for Justworks, your employees enter a co-employment relationship with Justworks, which means Justworks becomes a co-employer of record for tax and benefits purposes. Justworks handles payroll processing, federal and state tax filings, and manages access to health insurance, dental, vision, 401(k), and other benefits through their group plans. The co-employment structure is what allows Justworks to offer small businesses access to large-group benefits rates. However, it also means Justworks has a legal relationship with your employees, and your benefits are administered through Justworks' plans rather than plans you control independently.
What does Justworks charge per employee per month in 2026?
Justworks publishes two plan tiers: Basic and Plus. As of 2026, the Basic plan starts at $59 per employee per month for the first 49 employees (lower rates at higher counts), and the Plus plan - which includes access to medical, dental, and vision benefits - starts at $99 per employee per month. These are the base per-employee fees and do not include the actual cost of health insurance premiums, which are separate. For a company with 50 employees on the Plus plan, the Justworks fee alone is roughly $59,400 per year before any benefits premiums. BEG managed payroll at $25–$45 PEPM for the same 50 employees costs $15,000–$27,000 per year, all-inclusive for payroll. The difference is the bundled benefits access and co-employment structure that Justworks provides.
Can I use Justworks for payroll only, without their benefits?
Justworks' Basic plan provides payroll processing, tax filing, and HR compliance tools without requiring you to use Justworks for medical benefits. However, the Basic plan still involves the Justworks co-employment structure, and you're still paying Justworks' per-employee fee ($59+/employee/month) for what is primarily a payroll and compliance function. If you want payroll handled without co-employment and without a PEO premium, standalone managed payroll at $25–$45 PEPM is a more cost-efficient path. You get payroll fully managed, compliance handled, and no legal employment structure changes, at a lower per-employee cost.
How hard is it to leave Justworks?
Leaving Justworks, like leaving any PEO, requires unwinding the co-employment structure. Your employees must be formally re-onboarded under your sole employment, and any benefits administered through Justworks group plans need to be transitioned to plans you control. If your employees are on Justworks medical plans, those plans end at PEO exit, and new coverage must be in place before the transition. The exit process typically takes 60 to 90 days when planned carefully and is significantly more involved than switching from one payroll software to another. The best time to exit is at a health plan renewal date, which minimizes gaps in employee coverage.
When does Justworks make more sense than standalone managed payroll?
Justworks makes the most sense when (a) you cannot access competitive health insurance rates independently as a small employer, (b) you don't have a benefits broker relationship you want to maintain, (c) you're a startup or early-stage company that wants to outsource HR and benefits administration broadly, and (d) the co-employment structure doesn't create concern for your specific business or industry. For companies that already have a benefits broker and health plan they're happy with, Justworks' primary value proposition - benefits access through the PEO structure - is already covered. In that situation, paying Justworks' PEO premium for the payroll function alone is paying for bundled services you don't need.
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Anthony helps HR managers and CFOs evaluate payroll operations and implement managed solutions that eliminate internal overhead. BEG managed payroll at $25–$45 PEPM is for companies that want payroll handled without co-employment or benefits lock-in.
Ready to hand payroll off? See BEG Managed Payroll.
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