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High CPU when playing local but not remotely

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I am very confused with my situation. I have built a dedicated plex server for my friends and I. When running some test I noticed that if I have everything set to original then my friends typically don't buffery very often but if i set remote to 4mbps then they do get more buffering. I also get high cpu usage on the server. So I want to keep it at original for both less buffering and less cpu usage. BUT whenever I play a file from my pc though my network to the plex server it doesn't matter if they are connected or not I get high cpu usage on the server. This doesn't make any since my pc is local theirs is external the server shouldn't be transcoding any differently for me or them but only when I use plex it causes high cpu usage on the server.
Anybody have any ideas?

Thanks


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