Workers Comp Insurance Cost (by State)

Answer-first summary: Workers compensation insurance typically costs between $0.75 and $2.74 per $100 of payroll for most commercial trades, with a US median near $1.00–$1.20 per $100. Actual premiums depend on job classification (class code), state rating bureau rules, experience modification rate (EMR), and payroll size. Who this is for: Business owners in any state who need to understand workers comp pricing before getting a quote or comparing carriers.

TL;DR — Key Takeaways

• The national median workers comp rate is roughly $1.00–$1.20 per $100 of payroll; high-hazard trades (roofing, logging) can exceed $10–$20 per $100.
• Your experience modification rate (EMR) is the single biggest lever you control — a 1.25 EMR adds 25% to your base premium.
• State rating bureaus (NCCI in most states, independent bureaus in CA, NY, TX, and a few others) set the filed loss costs that carriers use as the starting point.
• Workers comp is mandatory in nearly every state once you have one or more W-2 employees (thresholds vary by state — [verify state]).
• Sole proprietors and partners are often exempt but can elect coverage, and many contracts require it.

How Workers Comp Premium Is Calculated

Workers comp premium is not a flat fee. Carriers use a formula driven by four variables:

Premium = (Payroll ÷ 100) × Class Rate × Experience Mod (EMR)

Some carriers also apply expense constants, minimum premiums, and premium discounts at higher volume thresholds. Policies are premium-audited at year-end — if your payroll grew, you owe additional premium; if it shrank, you receive a return.

Workers Comp Cost by State (Illustrative Rate Ranges)

State rates are filed with each state's rating authority. The figures below reflect approximate filed loss costs or benchmark rates as of recent NCCI and state-bureau filings. Actual carrier prices are filed rates modified by the carrier's loss-cost multiplier.

Important: These are illustrative benchmark ranges based on NCCI filed loss costs and publicly available bureau data. Your actual quote will differ based on your specific class codes, payroll, EMR, and the carrier's loss-cost multiplier. Monopolistic states (WA, OH, ND, WY) require coverage through the state fund — private carriers cannot write workers comp there.

Workers Comp Cost by Trade / Job Classification

Class codes drive dramatic rate differences. A clerical employee (NCCI code 8810) might cost $0.20 per $100 of payroll; a roofer (NCCI code 5551) can exceed $20 per $100 in some states.

Class codes are assigned by the rating bureau based on the actual work performed — not the company's name or SIC code. Misclassification discovered at audit can result in retroactive premium charges.

What Drives Workers Comp Cost Up or Down

Factors that increase premiums

• High-hazard class codes (roofing, logging, steel erection)
• Adverse claims history — an EMR above 1.00 adds a percentage surcharge
• High payroll growth — premium scales directly with wages
• Operating in high-cost states (CA, NY, NJ, CT consistently top the list)
• No formal safety program — carriers apply schedule debits

Factors that decrease premiums

• Low EMR — an EMR of 0.80 saves 20% versus the base rate
• OSHA-compliant safety programs — eligible for carrier schedule credits
• Higher deductibles or self-insured retentions (SIR) — you absorb small claims in exchange for a lower base rate
• Return-to-work programs — reduce indemnity severity; directly improve EMR over time
• Dividend plans (where available) — some carriers offer retrospective rating or group dividend plans for low-loss accounts

How to Get Workers Comp Coverage in 5 Steps

1. Identify your class codes. List every job type your employees perform. Your broker or the NCCI's Scopes Manual maps job descriptions to the correct class code. Getting this right prevents audit surprises.
2. Gather your payroll data. Carriers need estimated annual payroll by class code. Use your last payroll register or a current-year projection.
3. Pull your experience mod (EMR). If you've carried workers comp for 3+ years, NCCI or your state bureau has calculated your EMR. Your current carrier or broker can provide it. New businesses default to 1.00.
4. Submit to multiple carriers. An independent broker can access multiple admitted carriers plus the state assigned-risk pool (ARP) as a last resort. Quotes typically come back within 24–48 hours for clean accounts.
5. Review, bind, and receive your certificate. Once you accept a quote, the carrier issues a binder and a certificate of insurance (COI). Most lenders and GCs will require the COI before work begins.

Real-World Example: Mid-Size Electrical Contractor in Georgia

Scenario (illustrative — not a guarantee): A commercial electrical contractor in Atlanta employs 12 electricians and 2 office staff. Annual payroll breakdown:

• Electricians (NCCI 5190): $720,000 total wages
• Office/Clerical (NCCI 8810): $90,000 total wages

Estimated Premium Calculation:

With an EMR of 0.88 (3 years of below-average losses), the modified premium becomes:

$23,238 × 0.88 = ~$20,449

After a carrier schedule credit of 10% for a documented safety program:

$20,449 × 0.90 = ~$18,404 estimated annual premium

Without the low EMR and safety credit, the same account would run closer to $26,000+ — illustrating how claims management and safety investment directly offset cost.

Frequently Asked Questions

How much does workers comp insurance cost per employee?

Workers comp is not priced per employee — it is priced as a rate per $100 of payroll by job class code. A rough rule of thumb for budgeting: a low-hazard office employee earning $60,000 might cost $120–$240/year in workers comp premium; a roofer earning $60,000 might cost $4,800–$12,000/year or more depending on the state.

Is workers comp mandatory for my business?

In nearly every state, workers comp is required once you hire W-2 employees, though thresholds vary. Texas is the main exception — private employers can opt out, though doing so carries significant liability risk. Some states exempt domestic workers or agricultural workers below certain payroll thresholds. Always [verify state] requirements with a licensed broker or your state's Department of Insurance (DOI).

Can I get workers comp as a sole proprietor or LLC with no employees?

Sole proprietors and single-member LLCs are typically exempt from mandatory coverage, but many general contractors and project owners require proof of workers comp before awarding subcontracts. You can elect to purchase voluntary coverage to satisfy contract requirements. Cost for a sole proprietor is based on an "imputed payroll" set by the state.

What is an experience modification rate (EMR) and how does it affect cost?

The EMR (also called experience mod) is a multiplier generated by NCCI or your state bureau based on your actual claims losses compared to what similar businesses in your industry expected to lose over a 3-year rolling period. A 1.00 mod is average. A 1.25 mod adds 25% to your premium; a 0.75 mod reduces it by 25%. New businesses start at 1.00 until enough claims history accumulates.

Does workers comp cover independent contractors?

Standard workers comp does not cover 1099 independent contractors — it covers W-2 employees. However, misclassification of employees as contractors is heavily audited. If a worker is re-classified as an employee after a claim, the insured (you) may be responsible for uncovered losses. Carriers verify contractor status at audit.

What does workers comp actually pay for?

Workers comp pays four categories of benefits: (1) medical expenses — all reasonable and necessary treatment for work-related injuries, no deductible for the injured worker; (2) indemnity (lost wages) — typically 66.67% of the worker's average weekly wage up to a state maximum; (3) vocational rehabilitation in some states; and (4) death benefits for fatal injuries. It does not cover injuries that occur outside the scope of employment, self-inflicted injuries, or injuries from employee misconduct.

What is the state assigned-risk pool and when would I use it?

Every state has a market of last resort — often called the Assigned Risk Pool (ARP) or the National Council on Compensation Insurance (NCCI) Assigned Risk Plan — for businesses that cannot obtain coverage in the voluntary market due to high hazard, poor loss history, or new industry entry. Assigned-risk premiums are generally 20–50% higher than voluntary market rates. Working with an independent broker to improve safety programs and build a loss-run history is the fastest path back to the voluntary market.

How can I lower my workers comp premium right now?

The three highest-impact levers are: (1) verify your class codes are correctly assigned — overcoded payroll directly inflates your premium; (2) implement a documented return-to-work program, which reduces indemnity claims severity and improves your future EMR; (3) shop multiple carriers through an independent broker — carrier loss-cost multipliers vary, so the same risk can price very differently across admitted carriers.

Why Morrow for Workers Comp

1. Access to multiple admitted carriers. As an independent agency, Morrow places workers comp across a panel of admitted carriers — not just one company's products — which means we can find the carrier whose loss-cost multiplier and risk appetite best fits your trade and state. [Morrow to confirm: specific carrier list]
2. Class code accuracy from day one. Incorrect class code assignment is the most common source of audit surprises. Our placement process includes a review of your actual job duties against NCCI Scopes Manual definitions before we submit your application.
3. Fast COI turnaround. Most contractors and subcontractors need a certificate of insurance within hours of binding. We issue COIs same-day for active policies and can add additional insureds and waivers of subrogation as project contracts require.
4. Claims advocacy. When a claim is filed, we engage with the adjuster on your behalf to monitor reserve levels, flag inappropriate denials, and help you get injured workers back to modified duty — directly protecting your future EMR.
5. Assigned-risk mitigation. If you're currently in the assigned-risk pool, we build a plan to document your safety program and loss-control improvements to transition you to the voluntary market at the next renewal.

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Trust strip: Morrow (Afthonea Inc, DBA Morrow) is a licensed independent commercial insurance agency. [Morrow to confirm: licensed states and license numbers.] Carriers placed are admitted in their respective states. [Morrow to confirm: carrier panel and ratings.] [Morrow to confirm: Google or other verified review rating.]

Related Pages

• Commercial Insurance Overview — parent pillar
• General Liability Insurance Cost
• Business Owners Policy (BOP) Cost
• Workers Comp for Contractors
• What Is an Experience Modification Rate (EMR)?
• Workers Comp vs. Employers Liability

Author: [Morrow to confirm: named licensed P&C agent or advisor with credentials, e.g., "Jane Smith, CPCU, Commercial Lines Specialist"] Published: June 2026 Last updated: June 2026

Sources: - National Council on Compensation Insurance (NCCI) — loss cost filings and class code definitions - Workers' Compensation Insurance Rating Bureau of California (WCIRB) — California filed rates - New York Compensation Insurance Rating Board (NYCIRB) — New York filed rates - Pennsylvania Compensation Rating Bureau (PCRB) — Pennsylvania filed rates - National Association of Insurance Commissioners (NAIC) — market data reports - U.S. Bureau of Labor Statistics (BLS) — occupational injury and illness data - Insurance Information Institute (III) — workers compensation fact sheets - OSHA — workplace safety statistics and compliance resources - Texas Department of Insurance (TDI) — Texas nonsubscriber rules