How should PEO payroll costs be split on a business return?

Split the PEO package by tax character, not by the total cash payment. Gross wages, officer or shareholder-employee wages, employer payroll taxes, health benefits, retirement costs, and PEO administrative fees can belong in different return categories.

The correct line depends on the entity type and form instructions. The preparer's job is to use the PEO detail to classify the expenses supportably and document the tie-out from payroll reports to books to return.