But how much does it cost??
It’s one of the top questions on any small business owner’s mind. At WorkCompOne, we’re dedicated to making insurance easy and accessible. That means easy to buy and easy to understand.
If you’re looking to find out how much you might pay for the workers’ compensation coverage you need, you’ve come to the right place.
Here, we’ve rounded up everything we’ve written to date on how workers’ compensation costs, well — work.
Workers' Compensation Insurance Resources: Start Here ⤵️
Want to understand the basics of what the average small business pays for a workers’ compensation policy, and what will impact your costs? We recommend starting with this page:
This post offers a high-level overview of work comp policy costs, including:
- The average workers’ compensation cost for small businesses
- What influences how much coverage costs
- An overview of the factors that influence cost — like rates, classification codes, payroll and state workers' compensation markets
- How work comp insurance premiums are presented
For an explanation of how workers’ compensation premiums are calculated, read this post next:
This post breaks down the formula used by insurance carriers to calculate workers' comp premiums, and offers step-by-step instructions on how to find the estimated cost for yourself.
Plus, we now have a new free calculator! Use our interactive calculator to get an estimated premium amount. (Although our recommendation? Use it to organize and tally payroll by classification code — then get a real, live quote from WorkCompOne.)
If you still have questions, want step-by-step instructions or are looking for more examples, dive into the posts in the following section.
How to Estimate Your Workers' Compensation Cost
From examples of payroll breakdowns, to tips on choosing the right class code, to up-to-date state rates, we have plenty of resources to help you understand and estimate your potential workers’ compensation insurance costs.
1. Add Up Payroll for Each Employee
Workers’ compensation insurance premiums are based in large part on the rate per $100 in payroll. That’s why getting your payroll and workers’ compensation rate right is so important.
What should you do about part-time employees? Hourly workers? What about seasonal employees, or family members? What counts as payroll? Is rounding ok?
This blog post walks you through it: How to Calculate Payroll to Find Your Workers’ Compensation Cost
We also address pay-as-you-go workers' compensation policies and exactly how changes in payroll impact workers' comp.
2. Find Your Classification Code
Classification codes are unique to workers' compensation. They standardize how the work comp system — from rating agencies to insurance carriers — categorize and assess different businesses.
A classification code is an essential component of the workers’ compensation policy: both what employers pay and whether the business is properly covered. It’s also why you may need to divide employees into groups, based on what they do.
Each class code is assigned its own rate, and that rate is used to calculate the workers' compensation premium.
This blog post explains what class codes are, where to find them, and tips to choose the correct one: Workers Comp Insurance Cost: How to Avoid Overpaying
3. Look Up Your Workers' Compensation Rate
The rate for clerical work in Indiana is just $0.35, while a plumbing business might be $1.68 — nearly 5x higher. Workers' compensation costs are based on the rate set by your state’s rating agency or bureau.
This blog post covers:
- What workers' compensation insurance rates are
- How rates impact premiums
- How to understand work comp insurance rates
- An overview of workers' compensation rates by state
- What base rate states are
- And a lot more.
Learn more about how rates are set and where to find the ones that apply to your business: Workers’ Compensation Insurance Rates: What They Are & How They’re Set
4. Calculate Estimated Workers’ Compensation Cost Per Employee
Armed with your total payroll, class codes and the current state workers’ compensation rates, you can calculate the cost of workers’ compensation for each employee.
This can be used to add up your total estimated workers' compensation premium, and to understand how headcount impacts your insurance costs.
This blog post is a must-read: How to Calculate Workers’ Compensation Cost Per Employee
Get Advice on Workers’ Comp Policy Shopping
Now that you understand what factors in your price, you’re ready to start shopping around. These posts offer tips on getting the best price and coverage.
WorkCompOne has helped thousands of small business owners buy workers’ compensation coverage, many for the first time. Follow this “step-by-step beginner’s guide” to shop for your growing business. What to expect, what business details to have in front of you, and more.
Shopping for a workers’ compensation policy can be confusing. Here’s what you need to know to shop work comp the smart way.
What are employer liability limits? What limits should you choose? And how much will it cost? We break it all down in this post on workers' compensation limits of liability.
As a small business owner, trade contractor or general contractor, you know workers’ compensation insurance affects your bottom line and your ability to step onto the jobsite. What you may not realize is that there are special nuances, exceptions and considerations specific to trades and contractors.
Shop Smart in Your State
Workers’ compensation is regulated at the state level. Remember to always check your state workers’ compensation laws to make sure you’re compliant. This includes where you can buy workers' compensation insurance, who needs to be covered by the workers' comp policy, the definition of an employee under the state workers' compensation system, and current workers’ compensation rates.
We also have some state-specific resources for work comp shopping:
- Arizona: Small Business Owners: How to Get Workers’ Compensation Insurance in Arizona
- California: How to Get Cheap Workers’ Comp Insurance in California
- Florida: How Much Does Workers' Comp Insurance Cost in Florida?
- Georgia: How to Get a Workers' Compensation Quote in Georgia
- Illinois: What Illinois Small Businesses Need to Know About Workers’ Compensation Insurance
- Massachusetts: Massachusetts Workers’ Compensation Insurance, Explained in Under 5 Minutes
- Michigan: Workers’ Compensation Insurance in Michigan, Explained for Busy Small Business Owners
- Nevada: Nevada Small Businesses: What You Need to Know Before You Shop Work Comp
- New Jersey: Workers’ Compensation Insurance in NJ: How to Get It & What It Costs
- New York: How Much Does Workers' Comp Insurance Cost in New York?
- North Carolina: Need Workers’ Compensation Insurance in North Carolina? A Step-by-Step Guide for First-Time Buyers
- Oregon: 5 Common Questions About Oregon Workers' Compensation, Answered
- Pennsylvania: Pennsylvania Employers: What You Need to Know About Workers' Compensation Insurance
- South Carolina: South Carolina Workers’ Compensation: 2020 Rates & How Premiums Are Calculated
- Virgina: How to Get Workers’ Compensation Insurance in Virginia: A Quick Guide for First-Time Buyers
Read Tips for Buying Small Business Insurance
For even more advice on smart small business insurance shopping, see the resources below.
As experts in small business insurance, we’ve rounded up tips on where you can uncover savings. Here are 12+ ways to spend less on insurance. Have you tried them?
When it comes to choosing the right insurance for your business, it can be difficult to know where to start. Here are a few tips to get started shopping for small commercial insurance.
Insurance companies haven’t always been known for their simplicity. We know – we’ve heard the frustrations of first-time entrepreneurs, who want to protect their business, so they can get back to running their business. This post rounds up some of the top questions we hear.
Get a Workers’ Compensation Quote
If you’re ready to get a quote, our online quoting tool is fast and easy.