Workers' Compensation Premium Calculator
Calculate workers' comp premiums with all 50 states, NCCI class codes, experience modification, and safety program discounts.
Business Location
Employee Classifications
$665
$0.19 per $100
$630
$0.42 per $100
Experience Modification
→ At or below industry average
Safety Program Discounts
Premium Estimate
Total Payroll
$500,000
Total Employees
10
Premium % of Payroll
0.37%
Cost Per Employee
$184
Potential Savings Opportunities
- Improve experience mod to 0.75: Save $460/year
- Implement remaining safety programs: Save $276/year
Disclaimer: This calculator provides estimates using NCCI base rates and state multipliers. Actual premiums depend on carrier-specific rating, detailed loss history, and underwriting factors. Contact a licensed commercial insurance agent for binding quotes.
Workers Comp Calculator
Estimated Annual Premium
$1,839
CA | Exp Mod: 1.00
Base Premium
$1,295
Safety Discounts
-$0
Total Payroll
$500,000
Potential Savings
$736
Lower than 77% of comparable cases
Based on NCCI workers comp data 2024 (2024)
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Understanding Workers' Compensation Insurance
Expert Industry Guide
Workers' compensation insurance is legally mandated in nearly every state for businesses with employees. Understanding premium calculations enables employers to budget accurately and identify cost-reduction opportunities through safety programs and accurate classification.
Premium Calculation Formula
The basic formula: (Payroll / 100) × Class Rate × Experience Modifier × State Factor. Each component significantly impacts costs. A construction company with $500K payroll at class code 5645 (Carpentry - Residential, $11.50 rate) faces $57,500 base premium before modifiers.
NCCI Class Codes Explained
The National Council on Compensation Insurance (NCCI) maintains standardized class codes used in most states. Rates vary dramatically: clerical (8810) at $0.19 per $100 vs. roofing (5551) at $18.75 per $100. Accurate classification is critical—misclassification triggers audit penalties.
Experience Modification Rate (EMR)
Your EMR compares your three-year claims history to industry average. An EMR of 1.0 is average; 0.75 means 25% better than average (25% discount); 1.25 means 25% worse (25% surcharge). EMR improvements require sustained safety performance over 3+ years.
State Rate Variations
Workers' comp is state-regulated, creating significant cost variations. California (1.42x) and New York (1.38x) have the highest multipliers; Texas (0.78x) and Indiana (0.78x) the lowest. Four states (OH, ND, WA, WY) have monopolistic state funds—no private market.
Safety Program Discounts
Most states offer premium discounts for certified safety programs: Drug-Free Workplace (typically 5%), formal safety programs (2-7%), and return-to-work programs (2-5%). Combined, these can reduce premiums 10-15%. Documentation and certification requirements vary by state.
Premium Audit Considerations
Annual audits compare estimated payroll to actual. Underestimate and face significant additional premiums; overestimate and receive refunds. Many businesses use pay-as-you-go programs that base premiums on actual monthly payroll to avoid audit surprises.
Cost Reduction Strategies
Beyond safety programs: ensure accurate classification (many businesses have multiple codes), implement formal return-to-work programs, maintain detailed safety training records, consider higher deductibles for premium reduction, and shop markets at renewal with loss runs.
Disclaimer: This content is for informational purposes only and should not be considered professional advice. Always consult with qualified professionals for specific guidance related to your situation.