Professional Employer Organizations (PEOs) in Iceland

Have you ever wondered how large corporations do all their administrative work, such as paying salaries, securing health insurance, implementing benefits and retirement plans for their employees? Most companies, large or small, function with the help of collaboration. To become a leader, at a certain point it is very important to delegate tasks. The job of a successful person or brand is not to do all the work themselves, but to share responsibility and monitor well whether the delegated task is being completed. This not only reduces the workload for the company and allows it to focus on the ‘real work’, but also enables other organizations to generate revenue and in turn contribute to a country's economic growth. In most cases, these administrative tasks are outsourced to professional employer organizations or PEOs in Iceland.

What are Professional Employment Organisations?

A PEO is a B2B service company or firm that allows its clients, which in most cases are companies of all sizes, to outsource or delegate a variety of employee administration tasks to them. These tasks include just about everything there is to do, such as benefits, HR counseling, payroll, recruitment, risk management and/or training. 

A PEO typically charges a service fee based on a percentage of the employee’s total compensation. The role of a Professional Employer Organisation is essentially to take on the administrative tasks that are difficult for a company in a particular niche to complete.

The PEO enters into a contractual joint employment agreement with its clients and, through joint employment, becomes the Employer of Record (EoR) or virtual boss in terms of administrative and HR work, such as handling tax matters by filing payroll taxes under its own tax identification numbers. As the legal employer of the employees, the PEO is responsible for withholding the correct taxes, paying unemployment insurance and ensuring that the employees are insured. However, the client company retains the authority to issue instructions to the employees with regard to their day-to-day work.

PEO in Iceland

The role of a PEO becomes even more important if the client in question is a global brand and has employees working for it from all over the world. One such country that has expanded greatly in terms of business and enterprise is Iceland. Although Iceland is a small European country, it is home to many large companies that often have global operations. Therefore, the role of a PEO in Iceland is extremely important for these newly emerged start-ups and global brands in the country.

The PEO in Iceland is a relatively new model to facilitate this task of completing administrative and HR-related work on behalf of companies. Swapp Agency is a leading PEO company in Iceland and has prestigious clients in its portfolio, from large tech companies to financial giants.

In addition to regular assignments, they also handle cases where you have a contractor abroad and want to convert them into an employee, your company is in a non-compliant relationship with your contractor, your company wants to invest in these resources and show its commitment to them by converting them into employees, your contractors themselves demand a better status as full-time employees, you are looking for a cost-effective solution for converting your international contractors into employees, etc.

In today’s modernised, global world, the role of PEOs has become extremely important. Success today only comes when two ideas with their own expertise work together and form a joint venture. In business and in life, it is these right collaborations that move us forward.

Contact Swapp Agency for any kind of assistance in Iceland.