Workers comp cost in Texas comes down to three things: how much payroll you run, the type of work your employees do, and your claims history. Texas does not set one fixed rate that every insurer charges. Instead, each insurer files its own rates, and prices have trended down for several years, so shopping matters. As of mid-2026, Texas regulators accepted an overall average decrease in the benchmark loss costs that many rates are built on.
Who this is for: Texas employers who have decided to carry workers comp, or are weighing it, and want to understand what sets the price.
The short version
- Premium is roughly your payroll, divided into 100-dollar units, times a rate for each type of work.
- The type of work is captured by a category used for pricing, often called the class code, and it moves the price a lot.
- Your past claims produce a score that raises or lowers your price, known as the experience modifier.
- Texas insurers set their own rates, so two carriers can quote the same business very differently.
- As of mid-2026, the state's benchmark prices that carriers build their rates on (called loss costs) fell on average, continuing a multi-year decline.
What drives your price
| Factor | What it means | Effect on cost |
|---|---|---|
| Payroll | Your total wages, counted in 100-dollar units | More payroll, more premium |
| Type of work (class code) | A category for the risk of your work | Roofing costs far more than clerical |
| Claims history (experience modifier) | A score from your past claims | A good record lowers it, a bad one raises it |
| Carrier | Each insurer files its own rates | Shopping can change the price meaningfully |
How Texas sets rates
Texas is not a state that publishes one mandatory rate. It uses a national rating organization as its advisory body, which files benchmark numbers called advisory loss costs. Insurers then build their own rates, either on their own filed numbers or on those advisory loss costs. That is why quotes vary between carriers for the same business. As of mid-2026, the state accepted a new set of advisory loss costs at an overall average decrease of about 3.8 percent, effective July 1, 2026, following an even larger average decrease the year before. Rates for policies starting on or after that date have to use the current numbers, not last year's.
How to keep the cost down
The two levers you control most are your classification and your claims. Making sure each employee is placed in the correct type-of-work category matters, because a wrong category can overcharge you for years. Keeping claims down improves the score built from your history, which directly lowers your rate. Reporting your payroll accurately at audit avoids surprise bills. Because Texas insurers price differently and rates have been falling, comparing carriers at renewal is one of the simplest ways to make sure you are not overpaying.
A Texas trucking example
Illustrative, not a quote. A San Antonio trucking company with a dozen drivers gets a renewal that looks high. When we review it, part of the payroll for office staff was rated at the higher driving category by mistake, inflating the premium. We correct the classification, confirm the company's claims score is applied correctly, and shop the account against several carriers using the current lower loss costs. The corrected classes and a fresh set of quotes bring the price down without cutting any coverage.
Real questions Texas owners ask
How is workers comp priced in Texas?
It is based on your payroll counted in 100-dollar units, a rate for your type of work, and a score from your claims history. Each Texas insurer files its own rates, so prices vary between carriers.
Why does my type of work change the price so much?
The category that captures how risky your work is, called the class code, moves the price a lot. Risky trades like roofing cost far more than office work, so being placed in the correct category is important.
Does my claims history change my price?
Yes. Your past claims produce a score, called the experience modifier, that raises or lowers your rate. A clean claims history pulls it below average and lowers your cost, while frequent claims push it up and raise your price.
Are Texas workers comp rates going up or down?
As of mid-2026, the benchmark loss costs many rates are built on fell by an overall average of about 3.8 percent effective July 1, 2026, after a larger decrease the year before, continuing a multi-year decline.
Does Texas set one rate all insurers must charge?
No. Texas uses advisory loss costs as a benchmark, but each insurer files its own rates on top of that. That is why two carriers can quote the same business quite differently, and why shopping pays off.
How can I lower my workers comp cost?
Make sure your employees are in the correct type-of-work category, keep claims down to improve your score, report payroll accurately at audit, and compare carriers at renewal since Texas insurers price differently.
Why did my premium change at audit?
Texas comp premium is based on actual payroll, so if your wages were higher than estimated, the audit trues up the premium. Correct classifications and accurate payroll estimates reduce audit surprises.
Why Texas owners choose Morrow
- We shop the right market for you. Texas is the only state where workers' comp is optional for private employers, so Morrow helps you decide whether to subscribe or go without coverage, and places coverage fast through the competitive private market (or Texas Mutual, the insurer of last resort) when a client or public contract requires it.
- 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 Texas guides
Every Texas 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 Texas (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?
- Texas trucking workers comp
This guide is general information, not legal advice. Texas rules and penalty amounts can change, so verify current requirements with Texas Department of Insurance, Division of Workers' Compensation (TDI-DWC) or a licensed advisor before you rely on them. Last updated: July 2026.