Workers' Comp Calculator: How the State Estimates Work

Each one estimates an annual premium as payroll divided by 100, times a rate per $100 of payroll, times your experience modifier, less a 5% credit if you say you have a formal safety program. Washington is different: the state fund charges a rate for each hour worked, so that calculator asks for hours. North Dakota charges premium only on each worker's pay up to a wage cap, so that calculator caps the default payroll per worker.

Where an official source publishes a figure, the roof work default uses it and the page shows the source and effective date under the rate field. In Ohio and Massachusetts every trade default is a published rate. Every other default is an illustrative placeholder, not a filed or published rate, and can differ a lot from what you pay. Use the rate on your policy or quote.

It compares your claims history with others in your class. 1.00 is average; above 1.00 raises the premium and below 1.00 lowers it. The rating organization or state fund for your state issues it, and you can find it on your mod worksheet or ask your broker.

Ohio, North Dakota, Washington and Wyoming. In those states the state fund is the only option the calculator shows, because private insurers cannot write that coverage there (self-insurance aside).

It does not include expense constants, minimum premiums, state assessments and surcharges, premium discounts, schedule credits or debits, deductible credits, terrorism and catastrophe charges, or premium taxes. It is an estimate for planning, not a quote.

Outside the monopolistic states, the PEO tab models a pooled policy. It assumes a PEO rate of a fixed share of your rate (shown on each state page, from 0.46 to 0.60), a pooled mod of 0.82, and premium growth of 3% a year direct and 2% a year through a PEO. These are Benefitra modeling assumptions, not quotes or published benchmarks.

Most Texas private employers may choose not to carry coverage. The Texas calculator shows that non-subscriber option with its consequences; see the Texas page for the rules and official sources.

Experience rating usually uses the latest available three years of payroll and loss data, compared with similar employers in your classes (NCCI, ABCs of Experience Rating). The most recent policy year is normally left out because its claims are still developing, so a mod calculated in 2026 typically draws on policy periods from 2022, 2023 and 2024. That lag has two effects. A claim keeps affecting your mod for about three renewals once it enters the window, and safety improvements you make today show up in later mods rather than the next one. Check your mod worksheet each year for errors in payroll, class codes or claim reserves, because those inputs flow straight into your premium. Our experience mod guide covers the timeline in more detail.

Experience rating gives more weight to how often injuries happen than to how much each one costs. NCCI splits each claim at a split point approved in each state's filing: the part below it is primary loss, which reflects frequency, and the part above it is excess loss, which reflects severity and counts for less. Each state also caps individual losses with a per-claim accident limitation. The reasoning is that one very large loss can be chance, while a pattern of small claims predicts future cost more reliably. In practice, return-to-work programs, prompt reporting and active claims management, together with correcting classification errors, are the main levers employers have to bring a mod down. Our experience mod guide explains each strategy.

A lapse is any period when you have employees on payroll without a policy in force, even a few days between an expiring policy and a replacement that bound late. Workers' comp is mandatory for employers with employees in nearly every state, and depending on the state, penalties can include stop-work orders, fines per employee and personal liability for the owner. A lapse also stays on your insurance record. Many private carriers will not quote an account with a recent lapse, which can push you into a state fund, and a state fund covers payroll only in its own state. Most lapses come from missed payments, audit disputes or late binding, so set renewal reminders and keep payroll reporting current. See coverage lapses and the state fund trap.

Every state guarantees that an employer can buy coverage somewhere, through an assigned-risk pool, also called the residual market, or in some states a state fund acting as insurer of last resort. Rates there are set for the whole category, so a careful employer pays much the same as one with frequent claims. Private carriers price on your own record, so the way out is a file an underwriter can evaluate: loss runs, an experience mod, accurate payroll by class code and a written safety program. Newer trade contractors often need one to three years of history before private carriers will quote. Competitive state funds, such as SCIF in California or NYSIF in New York, are different again: they compete with private insurers and file their own rates. See moving from the state fund to the private market.

Your insurer or state fund assigns one or more class codes based on the work your business does, and the class code drives the base rate more than any other input: high-hazard construction work pays far more per $100 of payroll than office work. Most states use NCCI class codes, some use their own rating bureau's classes, and the monopolistic state funds use their own systems. Payroll classification errors are a common source of overcharges, and one misclassified code can raise premium substantially every year it goes uncorrected. Review the classifications on your policy and at each payroll audit, ask your broker to compare them with your actual operations, and request a correction from the insurer where the code does not match the work. Each state calculator page names the classification system it uses.