PEPM (Per Employee Per Month)

What is PEPM? (Per Employee Per Month)

Per Employee Per Month is a pricing model commonly used for HR software, benefits administration, and other employee-focused services where costs are calculated by multiplying the number of employees by a monthly rate.

PEPM pricing provides predictable, scalable costs that align with workforce size, making budgeting straightforward and ensuring vendors’ compensation reflects service scope. This model may include minimum employee counts, tier pricing for different company sizes, or variations based on modules selected.

PEPM pricing is transparent and easy to understand, though organizations must consider how employee count fluctuations affect costs. This pricing structure dominates the HR technology market, facilitating comparison shopping and financial planning for workforce management solutions.