CPEO Bonds

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What Are Certified Professional Employer Organization (CPEO) Bonds? 

CPEO bonds are required by the IRS to become a certified professional employer organization (CPEO). A CPEO surety bond holds professional employment organizations financially liable for paying all federal employment tax obligations.

How Much Do CPEO Bonds Cost?

All bonds must be equal to at least 5% of the CPEO liability under Section 3511, ranging from $50,000 to $1,000,000. The cost of a CPEO bond is calculated as a small percentage of the total bond amount based on credit score, typically 1–15%. Some markets may require collateral in addition to the premium. 

To find your bond price, submit a quote request now!

Bond Type
$50,000-$1,000,000Certified Professional Employer Organization Bondamount must be at least equal to greater of 5% of CPEO’s liability under section 3511 of Code during preceding calendar year (up to $1 million) or $50,000

How Do CPEO Bonds Work? 

A CPEO bond binds three parties in a legal contract:  

  • Principal: The professional employer organization wanting to be certified
  • Surety: The provider issuing the bond to the principal 
  • Obligee: The Department of Treasury/Internal Revenue Service

These bonds are necessary to be certified under the CPEO program. The IRS requires a CPEO to post a bond under section 7705(c) of the International Revenue Code (IRC). This ensures the CPEO pays any tax liabilities accrued under Subtitle C - Employment Taxes of the IRC. 

How to Get a CPEO Bond

To get your CPEO bond, submit a quote request now. We’ll do a soft credit check and provide the best price available. Once approved, you can purchase your bond at your convenience. We are happy to assist you with the application process and answer any questions you have.

How to Become a Certified Professional Employment Organization

The IRS uses an Online Registration System for PEO certification. Here are the steps to apply for certification:

Get started by applying for your CPEO bond today

How Do I Renew My CPEO Bond?

CPEO surety bonds expire annually on March 31st. We’ll contact you with renewal instructions and an invoice to keep your bond active before your term ends.

How Do I Update My CPEO Bond Form? 

If you need to make any updates or changes to information on your bond form, call 1 (800) 308-4358 or email [email protected] and one of our friendly representatives will be happy to assist you.

Call 1 (800) 308-4358 to talk with a Surety Expert