Workers' compensation premiums depend on your payroll size, the class code assigned to each job, and your experience modification factor. Enter your payroll, rate per $100, and experience mod into the calculator to project your annual premium instantly. Rates vary by state and insurer, so use the figures from your most recent policy or quote. This is an estimate, not insurance advice — confirm with your carrier or CPA.
Workers' compensation insurance protects employees who are injured or become ill on the job, and most states require employers to carry it. Your premium is driven by a straightforward formula: divide your payroll into $100 units, multiply by the class code rate assigned to each job type, then apply your experience modification factor (e-mod).
Class codes reflect the level of risk in each job — office work carries a much lower rate than construction or manufacturing. The e-mod compares your claims history to similar businesses of your size. An e-mod of 1.0 means you are average; below 1.0 earns a discount, and above 1.0 adds a surcharge. Because rates are filed with state regulators and vary by insurer, there is no universal rate table. Use the figures from your policy declaration page or your agent's quote.
Every employee is assigned to a class code based on the type of work they actually perform, not their job title. The National Council on Compensation Insurance (NCCI) maintains a standard class code system used by most states, though some states operate their own independent rating bureaus.
A misclassified employee can significantly distort your premium — either overpaying for low-risk work coded as high-risk, or underpaying and facing an audit surcharge later. Review your class code assignments with your agent at each policy renewal. If your business involves multiple job types, enter each group separately in the calculator to see how costs break down. Pairing workers' comp estimates with your true employee cost projections gives you a complete picture of what each hire actually costs beyond gross wages.
Your experience modification factor, or e-mod, is a multiplier that adjusts your premium based on your actual claims history relative to expected losses for your industry and size. It is calculated by your state's rating bureau or NCCI, not your insurance carrier.
A clean safety record over the rating period pushes your e-mod below 1.0 and reduces your premium. Frequent or severe claims push it above 1.0, increasing your cost. The rating period typically covers three years of loss data, excluding the most recent policy year. Even a single large claim can raise your e-mod for several years. Investing in safety training, return-to-work programs, and incident investigation pays off through lower premiums over time. Enter your current e-mod from your rating bureau notice into the calculator for an accurate projection.
Workers' comp policies are typically written on estimated payroll and then audited at the end of the policy term. If your actual payroll exceeds the estimate, you owe additional premium. If it comes in lower, you receive a credit. Accurate payroll projections prevent cash flow surprises at audit time.
Many insurers offer pay-as-you-go plans tied to your actual payroll reporting, which smooth out the audit adjustment. To lower your overall cost, focus on reducing claims frequency and severity — workplace safety programs, proper onboarding, and prompt claims reporting all contribute. Some states allow group self-insurance for qualifying employers, which can reduce costs but carries additional administrative responsibility. This calculator provides a premium estimate, not a binding quote — confirm all figures with your insurance carrier, agent, or your payroll tax advisor.
The employer pays the premium. Workers' comp costs are not deducted from employee wages. In most states, carrying coverage is a legal requirement for businesses with employees.
The e-mod is a multiplier applied to your premium based on your claims history compared to similar businesses. Below 1.0 means fewer claims than average and a lower premium. Above 1.0 means more claims and a higher cost.
Class code rates are typically refiled annually with state regulators. Your specific premium can also change at each policy renewal based on updated payroll estimates and your current e-mod.
Yes. Invest in workplace safety, train employees on injury prevention, report claims promptly, and maintain a return-to-work program. Over time, fewer claims lower your e-mod and reduce your premium.