Workers compensation in Tennessee is priced mainly on three things: how much payroll you run, the kind of work your people do, and your claims history. There is no single price, because a low-risk office and a roofing crew are worlds apart, but the way the price is built is the same for everyone. The good news is Tennessee prices have been drifting down, with the rating bureau proposing an average 2.0 percent cut to the base rates carriers build on, effective March 1, 2026, as of mid-2026, though a later law-only filing proposes an average 4.8 percent increase effective October 1, 2026 (approval pending as of mid-2026) tied to the April 1, 2026 medical fee-schedule update, so that cut may be partly offset.
Who this is for: Tennessee owners who want to understand what drives their workers comp price and roughly what to expect before they shop.
The short version
- Price is built from your payroll, the kind of work, and your claims history.
- The rating bureau files base rates and each carrier adds its own markup on top (this makes Tennessee a loss-cost state), so two carriers can quote the same business very differently.
- The category your work falls into for pricing, called the class code, has the biggest single effect.
- A score based on your past claims, called the experience modification rate, then raises or lowers your price.
- As of mid-2026, base rates were set to fall an average 2.0 percent for policies starting on or after March 1, 2026.
What drives your price
Every workers comp price starts with a rate for each 100 dollars of payroll, and that rate depends on the category your work falls into, called the class code. A clerical worker carries a low rate; a roofer carries a high one. Your total payroll then scales the price up or down. On top of that sits a score based on your claims history, called the experience modification rate, which rewards a clean record and penalizes a bad one. Tennessee is a loss-cost state, which means the rating bureau files the base rates and each insurer applies its own multiplier and discounts, so shopping between carriers can move the final number.
| What it is | How it moves your price |
|---|---|
| Payroll | The base the price is calculated on; more payroll means more premium |
| Kind of work (the class code) | Biggest single factor; risky trades carry much higher rates |
| Claims history (the experience modification rate) | A clean record lowers the price; past claims raise it |
| Carrier markup | Each insurer adds its own multiplier, so quotes differ |
| Payroll audit | Year-end check trues up the price to actual payroll |
Typical ranges for small businesses
These are illustrative annual ranges for small Tennessee employers, not quotes. Your real number depends on payroll, the exact work, and your claims record.
| Business type | Illustrative annual workers comp |
|---|---|
| Office or professional services | 500 to 2,400 dollars |
| Retail store | 1,200 to 4,800 dollars |
| Restaurant or cafe | 2,500 to 10,000 dollars |
| Cleaning or janitorial | 3,000 to 11,000 dollars |
| HVAC or trades contractor | 3,800 to 15,000 dollars |
| Roofing contractor | Much higher; priced case by case |
How to pay less without cutting coverage
The cheapest way to overpay is to let your work be miscategorized, because the wrong class code can inflate your price for years. Making sure your payroll is split into the right categories, keeping your claims history clean with basic safety and return-to-work steps, and comparing carriers all pull the price down. Because Tennessee is a loss-cost state, two carriers can quote the same business very differently, so shopping matters. We review your classifications and your claims score before you buy and each year at renewal.
A Kingsport example
Illustrative, not a quote. A Kingsport HVAC contractor with four installers and one office scheduler was quoted a high premium because the whole payroll had been lumped into the installation category. We split the office scheduler into the correct low-risk clerical category, so only the field payroll carried the higher installation rate, and we checked the claims score for errors. The corrected classification brought the price down without reducing any coverage. See our workers comp for HVAC contractors page.
Real questions Tennessee owners ask
How much does workers comp cost in Tennessee?
It depends on your payroll, the kind of work, and your claims history. A low-risk office might pay a few hundred to a couple thousand dollars a year, while risky trades pay much more. There is no flat rate.
How is my workers comp price calculated?
It starts with a rate for each 100 dollars of payroll based on the category your work falls into, then scales with your total payroll, and is adjusted by a score based on your claims history.
What has the biggest effect on my price?
The category your work falls into for pricing, called the class code, has the biggest single effect. A clerical worker carries a low rate and a roofer a high one, even for the same payroll.
Did Tennessee workers comp rates go up or down?
Down, then likely partly back up, as of mid-2026. The rating bureau proposed an average 2.0 percent cut to the base rates effective March 1, 2026, but a later law-only filing proposes an average 4.8 percent increase effective October 1, 2026 (approval pending) tied to the April 1, 2026 medical fee-schedule update. Rates are re-filed regularly, so confirm the current figure.
Why do two carriers quote me different prices?
Tennessee is a loss-cost state, so the rating bureau files base rates but each carrier adds its own multiplier and discounts. That is why the same business can get very different quotes, and why shopping pays off.
Can I lower my workers comp cost?
Yes. Make sure your payroll is in the right categories, keep your claims history clean with safety and return-to-work steps, and compare carriers. Miscategorized payroll is the most common way businesses overpay.
What is a payroll audit and will it change my price?
It is a year-end check of your actual payroll. If you ran more payroll than estimated you may owe more, and if you ran less you may get money back, so your final price reflects real payroll.
Why Tennessee owners choose Morrow
- We shop the right market for you. In Tennessee 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 insurer will take you the NCCI-run Tennessee Workers Compensation Insurance Plan 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 Tennessee guides
Every Tennessee 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 Tennessee (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?
- Tennessee HVAC workers comp
This guide is general information, not legal advice. Tennessee rules and penalty amounts can change, so verify current requirements with the Tennessee Bureau of Workers' Compensation or a licensed advisor before you rely on them. Last updated: July 2026.