For a small Minnesota business, workers compensation can run from a few hundred dollars a year for an office to several thousand for a trade contractor, because it is priced mainly on two things: how much you pay your people, and the kind of work they do. The base rates carriers build on are filed by the state's rating bureau and approved by the Department of Commerce, and they have been drifting down for several years, with base rates about 4.6 percent lower on average effective January 1, 2026. Your own price then depends on your payroll, your work category, and your claims history.
Who this is for: Minnesota owners trying to understand what drives their workers comp price and how to keep it reasonable.
The short version
- Price is built from your payroll times a rate for the category your work falls into.
- Minnesota does not use the national NCCI bureau; its own bureau files the base rates the Department of Commerce approves.
- Base rates fell about 4.6 percent on average for 2026, part of a multi-year downward trend.
- Your claims history adjusts your price up or down through a score built from past claims.
- Carriers apply their own multipliers, so filed base rates are a benchmark, not the final price.
What drives your price
Two numbers do most of the work. The first is your payroll, because comp is priced per 100 dollars of payroll in each job category. The second is the category your work falls into for pricing, often called the class code, which reflects how risky the work is: a roofing crew is priced far higher than an office. On top of that, an established business carries a score built from its past claims that nudges the price up or down. Minnesota is one of the few states that does not use the national NCCI bureau; its own bureau files the base rates, and the Department of Commerce approves them, after which each carrier applies its own multiplier.
| Factor | How it moves your price |
|---|---|
| Payroll | The base of the calculation; price is figured per 100 dollars of payroll |
| Work category (class code) | Higher-risk work carries a higher rate; office work is among the lowest |
| Claims history score | A record of past claims raises or lowers your price over time |
| Carrier multiplier | Each insurer adjusts the filed base rate up or down |
| Payroll audit | Year-end audits true up the price to your actual payroll |
Illustrative ranges
These are rough annual ranges for small Minnesota businesses, not quotes. The spread is wide because the work category matters so much.
| Business type | Estimated annual workers comp |
|---|---|
| Office or professional services | 600 to 2,500 dollars |
| Retail store | 1,200 to 5,000 dollars |
| Restaurant or cafe | 2,700 to 10,500 dollars |
| Cleaning or janitorial | 3,000 to 11,500 dollars |
| HVAC or trade contractor | 3,600 to 15,000 dollars |
How to keep it down
The two most common ways owners overpay are being placed in the wrong work category and carrying a claims score with errors in it. Getting your payroll split into the right categories, so office staff are not rated as field crew, can cut the bill, and reviewing the score built from your past claims each year catches mistakes that quietly raise your price. A safety and return-to-work plan lowers that score over time. We review both before you buy and at every renewal.
A Minnesota HVAC example
Illustrative, not a quote. A Minnesota heating and cooling contractor near Brooklyn Park has one owner, three field technicians, and one office scheduler. When the whole payroll was rated as field work, the price ran high. We split the scheduler's pay into the lower office category, corrected an error in the score built from past claims, and shopped the account, which brought the renewal down without changing coverage. See our workers comp for HVAC contractors page.
Real questions Minnesota owners ask
How much does workers comp cost in Minnesota?
It depends on your payroll and the kind of work. Office businesses might run a few hundred to a couple thousand dollars a year, while trade contractors run much higher. Price is figured per 100 dollars of payroll in each work category.
What decides my workers comp price in Minnesota?
Mainly your payroll and the category your work falls into for pricing, plus a score built from your past claims and the individual carrier's multiplier. Higher-risk work carries a higher rate.
Did Minnesota workers comp rates go up or down for 2026?
Down. The state approved base rates about 4.6 percent lower on average effective January 1, 2026, part of a multi-year downward trend in Minnesota base rates.
Who sets workers comp rates in Minnesota?
Minnesota is one of the few states that does not use the national NCCI bureau. Its own bureau files the base rates, and the Department of Commerce approves them before carriers apply their multipliers.
Why did my price change at the year-end audit?
Workers comp is estimated on projected payroll and then trued up. At the year-end audit the carrier checks your actual payroll and adjusts the price, so a busier year can raise it and a slower year can lower it.
How can I lower my workers comp cost?
Make sure your payroll is split into the right work categories, review the score built from your past claims for errors each year, and run a safety and return-to-work plan. We check all three before you buy and at renewal.
Does every insurer charge the same, or does the price vary?
No. The filed base rate is a benchmark. Each carrier applies its own multiplier, and your payroll, work category, and claims score adjust it, so the final price varies from one insurer to the next.
Why Minnesota owners choose Morrow
- We shop the right market for you. In Minnesota you buy workers' comp on the open, competitive market from any private insurer licensed in the state, because there is no state fund, and if no carrier will take you the assigned-risk plan (MWCARP) is the guaranteed backstop, so we can shop your rate freely and still have a fallback for hard-to-place work.
- We catch pricing mistakes. Your price depends heavily on the category your work falls into for pricing (the class code). Put people in the wrong category and you overpay for years. We review your payroll and classifications before you buy.
- Proof of coverage, fast. Need a certificate (proof of coverage) for a general contractor or a landlord before Monday? We turn those around the same business day for most carriers.
- We help lower the score that drives your price. Insurers give you a score based on your past claims that raises or lowers your cost (the experience modification rate). We review it each year, flag errors, and connect you with return-to-work and safety resources that bring it down.
- Real people when a claim happens. When someone gets hurt, we stay involved through the life of the claim, not just at renewal.
Related Minnesota guides
Every Minnesota business is set up a little differently. These companion guides answer the same question for other situations, plus the national explainers behind the terms used here.
- Business insurance in Minnesota (start here)
- Workers comp: the owner's overview
- I own an LLC: do I need workers comp?
- I'm a sole proprietor: do I need workers comp?
- I own a corporation (C-corp or S-corp): do I need it?
- We're a partnership: do we need workers comp?
- We're a nonprofit: do we need workers comp?
- My workers are 1099: do I still need it?
- Only part-time or seasonal staff: do I need it?
- I only employ family: do I need workers comp?
- Remote or out-of-state staff: do I need coverage?
- What happens if I don't carry workers comp?
- How do I get workers comp (even if turned down)?
- What insurance do I need for a contractor license?
- Workers compensation insurance, explained
- What workers comp costs (national guide)
- Glossary: workers comp class code
- What is an experience mod, and how do I lower it?
- Minnesota HVAC workers comp
This guide is general information, not legal advice. Minnesota rules and penalty amounts can change, so verify current requirements with the Minnesota Department of Labor and Industry or a licensed advisor before you rely on them. Last updated: July 2026.