An analysis of Insperity vs. Paychex reveals a compelling opportunity to realize immediate, significant, and compounding savings by transitioning providers.
This analysis is built on conservative assumptions and verifiable pricing, presenting an opportunity grounded in fiscal reality. The numbers speak for themselves—and they tell a story of immediate value and sustained competitive advantage.
Every dollar matters in today's competitive landscape. This analysis quantifies the financial impact of a PEO transition with precision, revealing not just immediate savings, but a strategic advantage that compounds year over year.
A comprehensive financial analysis reveals a compelling opportunity to enhance operational efficiency and generate significant, compounding savings by migrating PEO services from Insperity to Paychex.
The transition, effective for a January 2026 go-live, produces total first-year savings of $66,911. This is driven by substantial baseline annual savings of $51,700 and a net one-time incentive of $15,212 from Paychex.
Due to the lower recurring cost base, the savings compound annually. We project a total cumulative savings of $175,010 by the end of Year 3.
We recommend approving this transition to realize these substantial financial benefits.
These figures represent actual quoted costs from Paychex and projected 2026 rates from Insperity based on historical trends. The analysis applies conservative 3% annual inflation to baseline savings—the true savings could be even greater given Insperity's historical rate increases.
Financial analysis and recommendation to transition PEO services from Insperity to Paychex, effective January 2026.
The first-year savings are immediate and significant, composed of both baseline savings and one-time incentives.
What makes this transition particularly compelling is the immediate ROI. Unlike multi-year initiatives that require patience, this change delivers tangible value from day one. The $66,911 in Year 1 savings represents money that can be redeployed to strategic priorities—whether that's talent acquisition, technology investment, or simply stronger margins.
The beauty of this structure: baseline savings provide a permanent cost reduction, while Paychex's promotional credit effectively covers the transition costs and then some.
| Description | Amount |
|---|---|
| A. Baseline 2026 Savings (Apples-to-Apples) | $51,699.72 |
| B. One-Time Incentives & Costs | |
| 3 Months Waived Admin Fee (Credit) | $18,811.75 |
| One-Time Setup Fee (Cost) | ($3,600.00) |
| Net One-Time Benefit | $15,211.75 |
| TOTAL 1ST YEAR SAVINGS (A + B) | $66,911.47 |
The $51,700 in annual baseline savings is driven by massive gains in Administration and Workers' Comp, which easily offset a minor, calculated increase in the benefits package.
Notice the strategic trade-off: we're accepting a modest $3.5K increase in benefits costs to unlock over $55K in admin and WC savings. That's a 16:1 return on the benefits delta—a spread that dramatically favors operational efficiency.
| Cost Category | Insperity (Current) | Paychex (Proposed) | Annual Savings |
|---|---|---|---|
| Admin (PEPM, SUTA, EPLI) | $131,376.00 | $86,023.00 | $45,353.00 |
| Benefits (Employer Share) | $583,901.29 | $587,361.12 | ($3,459.83) |
| Workers' Compensation | $15,479.83 | $5,673.28 | $9,806.55 |
| TOTAL ANNUAL BASELINE | $730,757.12 | $679,057.40 | $51,699.72 |
Calculation: ($45,353.00) + ($9,806.55) - ($3,459.83) = $51,699.72
The savings compound significantly over time. This projection applies a conservative 3% annual inflation rate to the $51,700 baseline savings only.
This is where the math becomes truly powerful. Starting from a lower cost base means every percentage increase is calculated on a smaller number—Paychex's 3% annual growth compounds on $679K while Insperity's compounds on $731K. Over three years, that structural advantage creates additional value beyond the base savings.
The $51,700 'baseline' is a very conservative, apples-to-apples comparison that assumes 0% renewals for both providers. This is unrealistic. The true savings are projected to be even higher, as Paychex's rates are locked for 4 months after Insperity's June 1st renewal, shielding us from their projected 5.5% increase. This 4-month rate lock advantage adds an estimated $10,705 to the Year 1 savings, which is not included in this compounding model.
Each year builds on the last. Notice how the annual savings grow from $67K to $53K to $55K—the baseline portion grows with inflation while we've already captured the one-time credit in Year 1.
| Year | Annual Savings | Cumulative Total Savings |
|---|---|---|
| Year 1 (2026) | $66,911.47 | $66,911.47 |
| Includes $51,699.72 baseline + $15,211.75 net one-time incentive | ||
| Year 2 (2027) | $53,250.71 | $120,162.18 |
| Baseline savings + 3% inflation adjustment | ||
| Year 3 (2028) | $54,848.23 | $175,010.41 |
| Baseline savings + 3% inflation adjustment | ||
A detailed, line-by-line breakdown of all baseline annual costs used to calculate the savings projections.
Transparency matters. This table shows every dollar—the good, the bad, and the neutral. We're not hiding the benefits increase or glossing over any costs. The case holds up under scrutiny because the net math is undeniable.
| Cost Category | Insperity | Paychex | Annual Savings |
|---|---|---|---|
| Admin (PEPM, SUTA, EPLI) | $131,376 | $86,023 | $45,353 |
| Benefits (Employer Share) | $583,901 | $587,361 | ($3,460) |
| Workers' Compensation | $15,480 | $5,673 | $9,807 |
| Total Baseline Annual Savings | $51,700 |
At the end of the day, this decision comes down to financial discipline and strategic resource allocation.
$175K over three years isn't just a line item—it's hiring capacity, technology upgrades, or cushion against market volatility. It's the difference between reactive and proactive budgeting. The transition carries minimal operational risk with managed implementation, while the status quo guarantees we leave six figures on the table.
The financial analysis clearly indicates that a transition to Paychex is a strategically sound decision. The move generates immediate first-year savings of $66,911.47 and compounds to $175,010.41 in three years, all based on conservative baseline assumptions.
We recommend proceeding with the proposed implementation timeline for a January 2026 go-live.
Beyond the numbers, here's what this transition delivers in practical terms:
A managed implementation process targeting a January 2026 go-live date.
Finalize SOW, configure Paychex platform, map data, and define payroll/benefit rules.
Transfer all employee census data, YTD payroll history, and benefit elections.
Conduct employee welcome sessions, platform training, and manage the Open Enrollment process for 2026 benefits.
Run parallel payrolls (shadowing Insperity) in December 2025 to validate all calculations, deductions, and tax withholdings.
Process the first official Paychex payroll.
Key Date: First check for 1/1 - 1/15 pay period to be dated 1/23/2026.