Workers' Comp Premium Calculator
Estimate your annual workers' compensation premium from payroll, class code rate, and experience mod, plus the NCCI overtime exclusion and cost per employee.
Workers' Comp Premium Calculator
Class codes and payroll
Enter the rate per $100 of payroll from your declarations page. A 1.5% rate is 1.50, not 0.015.
A rate under $0.05 per $100 is unusually low. Check whether you entered a decimal percentage instead of a rate per $100.
Overtime handling
NCCI lets you strip the premium portion of overtime out of reportable payroll when your records separate it. A few states, Pennsylvania and Delaware most commonly cited, do not allow the exclusion.
Rating factors
1.00 is industry average. A 0.80 means you pay 20% less than average for your class, 1.25 means 25% more. Enter a schedule credit as a negative percent and a debit as a positive one.
Most published mods land between 0.50 and 2.00. NCCI caps vary by state.
State and headcount
Policy charges (optional)
The expense constant is a flat per-policy charge, usually $200 to $350 depending on state. Premium discount only applies once standard premium clears the state threshold, so most small policies get none.
Rates vary by state, class code, and carrier. This is an estimate for budgeting, not a quote, and your carrier trues it up at the annual payroll audit.
Premium by class code
| Class | Chargeable payroll | Rate | Manual premium | Share |
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How workers' comp premium is calculated
Every carrier in the country starts from the same three numbers: your annual payroll, the rate attached to your class code, and your experience modification rate. Payroll gets divided by 100 first, because comp rates are quoted per $100 of payroll rather than as a percentage. So $500,000 of payroll in a class rated at $1.50, with a mod of 1.00, gives a manual premium of ($500,000 / 100) x $1.50 x 1.00 = $7,500.
A real quote worksheet does not stop there. It works through a stack of premium elements in a fixed order, and this calculator follows the same order:
- Manual premium: chargeable payroll per class, divided by 100, times each class rate.
- Modified premium: manual premium times your experience mod.
- Standard premium: modified premium times the schedule rating factor (a credit or debit the underwriter applies).
- After premium discount: larger policies get a tiered discount once standard premium clears the state threshold.
- Plus the expense constant: a flat per-policy charge, usually $200 to $350.
- Minimum premium floor: if the total lands under the carrier minimum, you pay the minimum.
One rounding note. NCCI rounds payroll and each premium element to the nearest whole dollar as it goes. This page carries full precision and rounds only for display, so a carrier worksheet can land a few dollars off from what you see here. That gap is trivial next to the annual payroll audit, which trues the whole thing up against payroll you actually ran. Sources: NCCI Basic Manual Rule 2 and Rule 3, as published by the North Carolina Rate Bureau and mirrored in the Indiana Compensation Rating Bureau premium algorithms.
What counts as payroll, and the overtime excess exclusion
Reportable remuneration under NCCI Rule 2 covers wages, salaries, commissions, bonuses, holiday and vacation pay, piecework, and the value of lodging or meals given in place of wages. Left out are tips and gratuities, severance (other than accrued vacation), verified business expense reimbursements, employer contributions to group insurance and retirement plans, employee discounts, and third-party disability benefits. Owners and officers who elect coverage get reported subject to state minimum and maximum payroll caps, which is why their chargeable payroll often sits well under their actual salary.
Overtime is the adjustment that moves the most money at audit. Only the premium portion, the extra half or extra full pay above straight time, comes out of the base:
- Extra pay recorded separately: the entire extra pay is excluded.
- Combined overtime pay at time and a half: one-third of the total is excluded.
- Double time recorded separately: one-half is excluded.
The catch is record keeping. The exclusion only holds if your payroll records break the amounts out by employee and by class code, so an auditor can trace them. Records that show one lump overtime figure get charged in full. Pennsylvania and Delaware are the states most often cited as disallowing the exclusion outright. And watch out for shift differentials: they are premium pay but not overtime, so they stay in the base. If you need to separate straight time from the premium portion first, the overtime pay calculator and the timesheet hours calculator do that split.
Experience mod, schedule credits, and the multipliers you can move
The experience mod measures your claims against what a business of your size in your class is expected to produce. It uses three years of loss data and skips the most recent policy year, so a 2026 mod usually reflects 2022 through 2024. The class average is 1.00 by construction: a 0.80 means 20% below expected losses, a 1.25 means 25% above. NCCI runs experience rating in most states, while California, New York, Pennsylvania, New Jersey, Delaware and a handful of others use their own bureau. Below the state eligibility threshold you do not get a published mod at all and are rated at 1.00.
Schedule rating sits on top of that. Underwriters can apply a credit or debit, commonly within about 25% either way, for safety programs, management quality, employee selection, and loss control. Premium discount is different: it is a size-based tier that only kicks in once standard premium clears a state threshold, so most small policies never see it. The three move on different clocks. The class rate is fixed, the mod is earned over three years, and the schedule credit is negotiated at renewal.
Why your quote will not exactly match this estimate
Rates vary by state, class code, and carrier, so this page is an estimate for budgeting, not a quote and not a bindable number. The gaps come from a few places. States regulate their own rates and benefit levels, so the same class code can cost several times more across a state line. Independent bureau states publish their own codes and rates instead of NCCI's. Ohio, North Dakota, Washington, and Wyoming are monopolistic: coverage comes from a state fund, and Washington assesses premium per hour worked rather than per $100 of payroll, which this formula does not model. Add terrorism and catastrophe loadings, officer payroll caps, and the audit true up on top of that. An estimate built this carefully still typically lands within 15% to 25% of a real quote for a business with no claims history.
The one input you control completely is the payroll figure this all starts from. Clean per-employee, per-class payroll with overtime broken out is what makes the exclusion stick at audit. The Payroll Calculator app tracks gross pay and overtime per employee across a full payroll run, which is exactly the record an auditor wants to see. From there, pair this page with the employer cost calculator for the fully loaded cost per hire, the SUTA and FUTA calculator for the other employer cost that swings on a state rate, and the multi-employee payroll calculator to build the payroll base by class.
Frequently Asked Questions
Common questions about workers' comp premium calculator
How is workers' comp premium calculated?
Every US carrier starts from the same formula: (annual payroll / 100) x class code rate x experience modification rate. Payroll is divided by 100 because rates are quoted per $100 of payroll. A business with $500,000 of payroll in a class rated at $1.50 and a mod of 1.00 has a manual premium of $7,500. From there the worksheet adds a schedule credit or debit, a premium discount if the policy is large enough to earn one, and a flat expense constant. If the total still comes in under the carrier minimum, you pay the minimum.
What is an experience modification rate (EMR)?
The EMR compares your actual workers' comp losses to the losses expected for a business of your size in your industry class. It runs on three years of claims data and skips the most recent policy year, so a 2026 mod typically uses 2022, 2023, and 2024. A 1.00 is average by design: 0.80 means you pay 20% less than a comparable business, 1.25 means 25% more. NCCI administers experience rating in most states, while California, New York, Pennsylvania, New Jersey, Delaware and several others use their own bureau. You only get a published mod once your premium clears the state eligibility threshold. Below that, you are rated at 1.00.
Does overtime count toward workers' comp payroll?
The straight-time portion does, the premium portion usually does not. Under NCCI Basic Manual Rule 2, if your records separate the extra overtime pay, the entire extra pay is excluded. If overtime is recorded as one combined amount at time and a half, one-third of it is excluded. If double time is recorded separately, one-half is excluded. The exclusion only applies when your payroll records break the amounts out by employee and by class, otherwise the auditor charges the full amount. A few states, Pennsylvania and Delaware most commonly, do not allow the exclusion at all. Our overtime pay calculator works out the premium portion for you.
What is a workers' comp class code and where do I find my rate?
A class code describes the work being done, and each code has a rate attached that reflects how risky that work is. NCCI publishes the codes used in most states, while California (WCIRB), New York (NYCIRB), Pennsylvania (PCRB), New Jersey, Delaware and several others publish their own. Rates swing enormously by code and state: clerical work can run around $0.25 per $100 of payroll while roofing can exceed $15. Your rate appears on your policy declarations page or on your carrier quote worksheet, and that is the number to type into this calculator.
What is the expense constant and the minimum premium?
The expense constant is a flat charge added to every workers' comp policy, typically $200 to $350 depending on state. It pays for the fixed cost of issuing and administering the policy, so it does not shrink with the size of the risk. The minimum premium is the floor a carrier will write a policy for: if your calculated premium plus expense constant lands under it, you pay the minimum. Both matter most to very small employers, where together they can be the majority of the bill.
How much does workers' comp cost per employee?
Employers nationally pay somewhere in the range of $0.75 to $2.74 per $100 of payroll, which works out to roughly $90 to $100 per employee per month for a typical office or light commercial risk. That average hides a lot. Class code and state drive almost the whole number, so a clerical employee and a roofer at the same company can differ by 50 times. Treat the per-employee tile as a budgeting figure, not a quote. To see it next to your other employer costs, use the employer cost calculator.
Are workers' comp rates the same in every state?
No. Each state regulates its own rates and benefit levels, so the same class code can cost several times more in one state than in another. Four states (Ohio, North Dakota, Washington, and Wyoming) are monopolistic: you buy coverage from a state fund rather than a private carrier, and Washington assesses premium per hour worked rather than per $100 of payroll. In those states this calculator is a rough sanity check at best.
Is this calculator a quote?
No. It reproduces the arithmetic carriers use, but every input that matters is set by your state and your carrier: rates, credits, discount tiers, expense constants, minimum premiums. The final bill is trued up at your annual payroll audit against the payroll you actually ran and the classes you actually used. Estimates built this way typically land within about 15% to 25% of a real quote for a business with no claims history. For the payroll figure this all starts from, the Payroll Calculator app tracks gross and overtime per employee.