How to Calculate Workers Compensation Cost Per Employee | Pie Insurance

Finding out how much you’ll need to pay for workers’ compensation insurance per employee can be a daunting task. But fear not! We’re here to break it down for you in three easy steps. So grab a cup of coffee and let’s get started!

Step 1: Determine Your Employee’s Class Code

Before we dive into the numbers, we need to determine your employee’s classification code. This code is assigned based on the industry your business belongs to. It takes into account the tasks your employees perform and the level of risk associated with their work.

Reading: How to calculate workers comp insurance

To find your classification code, think about the products or services your business offers and the types of tasks your employees handle. You should also consider whether you have any contractors or subcontractors who need coverage.

Step 2: Find the Premium Rate for the Employee’s Class Code

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Now that you have your employee’s classification code, it’s time to find out the premium rate. Different workers’ compensation insurance providers have varying rates for each class code. These rates are usually given in dollars and cents per $100 of payroll for each code.

To find the best price for your business, it’s recommended to request quotes from multiple insurance providers. Alternatively, you can seek the assistance of an independent agency or broker who can evaluate your options and present you with the most competitive rates available.

Step 3: Calculate Your Annual Payroll and Do Some Basic Math

Calculating the cost of workers’ compensation for an employee involves understanding your payroll numbers. Take into account all your employees, whether they are full-time, part-time, temporary, or seasonal. If you can’t calculate the gross payroll for each employee, you can estimate the projected payroll.

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Once you have the estimated annual payroll for the employee, divide that number by 100. Then, multiply the result by the premium rate for the class code. This will give you the total cost of workers’ compensation insurance for that employee.

Compare Your Calculations with Insurers

Keep in mind that the steps we just went through only provide a rough estimate. Other factors, such as the number of employees, location, and changes in experience, can influence the actual cost of workers’ compensation insurance.

Feeling overwhelmed? Don’t worry! You don’t have to do the math all by yourself. Instead, consider reaching out to a trusted insurance provider who has experts that can make the process easy and hassle-free. They’ll guide you through the whole process and ensure your business is properly protected.

Thanks for reading! Remember that this information is for educational purposes only, and it’s always a good idea to consult your state laws or seek legal advice for specific information. If you’re a small business owner, take a moment to learn more about workers’ compensation insurance and even get a customized rate in just three minutes. Stay safe and insured!

Source: https://amajon.asia
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