Workers' compensation premium calculator
Premium is payroll divided by 100, multiplied by your class rate, adjusted by your experience modification factor, then moved again by any schedule credit or debit the underwriter applies.
Result
$18,200 estimated annual premium
| Manual premium1.2 per $100 of $1,500,000 payroll | $18,000 |
|---|---|
| Experience modificationExperience mod 1 | $0 |
| Schedule credit or debit0% applied to modified premium | $0 |
| Expense constantFlat carrier charge per policy | $200 |
| Total | $18,200 |
Shareable result: https://peosignal.com/calculators/workers-comp-premium?payroll=1500000&rate=1.2&mod=1&schedule=0&expense=200
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What this assumes
- Premium is calculated on a single class code; a real policy splits payroll across every applicable code.
- Excludes state assessments and terrorism loadings, which vary by jurisdiction and carrier.
- Assumes payroll is reported gross and includes overtime at straight time, per standard NCCI rules.
How the maths works
Manual premium is payroll ÷ 100 × the class rate. The rate is set per class code, so the same employee reclassified into a lower-hazard code can change the premium by multiples without anything about the job changing on the ground.
The experience modification factor compares your claims history against the average for your class. It multiplies the manual premium, which is why claim frequency hurts more than a single large claim in most rating formulas.
Schedule credits and debits are underwriter discretion, applied after the mod. They are the part of the renewal that is genuinely negotiable, and a PEO's pooled placement is usually argued on exactly this line.
Check the estimate against a real quote
Send the inputs above to a broker and get priced numbers back for your headcount.
Questions
- How is workers' comp premium calculated?
- Payroll ÷ 100 × class rate × experience mod, then schedule credits or debits, then the expense constant. State assessments are added afterwards and vary by jurisdiction.
- What is a good experience mod?
- Anything below 1.00 means your claims history is better than the class average and reduces premium directly. New businesses without three years of claims history are assigned 1.00.
- Can a PEO lower workers' comp cost?
- Often yes, because the PEO places your payroll inside a larger pooled programme and may carry a better mod than a small employer can achieve alone. Compare the pooled rate against your direct quote using the same class code and payroll.
Related
- Workers' compensation by state — monopolistic states and rate-filing rules
- PEO cost calculator — premium in the context of total employer cost
- PEO rules by state — where PEO placement changes your coverage route