# What is my workers comp premium?

Estimates a workers’ compensation insurance premium: payroll ÷ 100 × the rate for each job class, added up, then times the experience modification rate (EMR) and any schedule rating credit or debit.

- Page: https://www.acalculator.org/finance/workers-comp-calculator
- JSON spec: https://www.acalculator.org/finance/workers-comp-calculator.json
- Version: 1f88f30e0178

## Default answer

Example with the default inputs (Job classes [Payroll $150,000.00, Rate per $100 $0.35; Payroll $350,000.00, Rate per $100 $5.80], Experience modification rate (EMR) 0.85, Schedule rating (optional) −10%): With $500,000.00 of payroll and an experience mod of 0.85, the estimated workers comp premium is $15,931.13 a year.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| classes | Job classes | For each job class on the policy: the yearly payroll and the rate per $100 of payroll, 1 to 20 classes. |
| emr | Experience modification rate (EMR) | Your experience mod: 1.00 is average, below 1.00 a credit, above 1.00 a debit. |
| sched | Schedule rating (optional) | A credit (negative) or debit (positive) the insurer applies for your workplace, as a percent. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| premium | Estimated premium | Manual premium × EMR × (1 + schedule rating ÷ 100), for a year. |
| manual | Manual premium | Each class’s payroll ÷ 100 × its rate, added up: the base premium before any modification. |
| modified | After the experience mod | Manual premium × EMR. |
| modEffect | Experience mod effect | Modified premium − manual premium: negative is a saving, positive a surcharge. |
| scheduleEffect | Schedule rating effect | Modified premium × schedule rating ÷ 100: negative is a credit. |
| payroll | Total payroll | All the class payrolls added up. |
| effectiveRate | Effective rate per $100 of payroll | Estimated premium ÷ total payroll × 100. |

## Method

Manual premium = Σ (class payroll ÷ 100 × class rate). Modified premium = manual premium × EMR. Estimated premium = modified premium × (1 + schedule rating ÷ 100). Effective rate = estimated premium ÷ total payroll × 100.

## Assumptions

- The rates are the insurer’s rates per $100 of payroll for each class code; type them from your quote or your state’s rating bureau.
- Premium discounts, expense constants, deductible credits, terrorism and catastrophe charges, and state assessments are not included.
- Payroll is the yearly payroll the policy rates; rules that leave out part of overtime pay or cap officers’ payroll vary by state and are not applied.

## Worked examples

1. classes = {"payroll":500000,"rate":2.919} or undefined, emr = 1.25 gives manual = $14,595.00, modified = $18,243.75, modEffect = $3,648.75, premium = $18,243.75, effectiveRate = $3.65. Source: Texas Department of Insurance, Texas workers’ compensation rate guide (payroll for each classification × the rate per $100 of payroll; the basic premium is the sum; Code 5551 at an LCM of 1.50 has a rate of 2.919), https://www.tdi.texas.gov/wc/regulation/rcomp.html; California Department of Insurance, Workers Compensation guide (the payroll for each classification is multiplied, per each $100 of payroll, by the rate; the sum is the base premium; then experience modification and schedule rating), https://www.insurance.ca.gov/01-consumers/105-type/95-guides/09-comm/WorkersCompensation.cfm.
2. classes = {"payroll":150000,"rate":0.35} or {"payroll":350000,"rate":5.8}, emr = 0.85, sched = -10% gives payroll = $500,000.00, manual = $20,825.00, modified = $17,701.25, scheduleEffect = -$1,770.13, premium = $15,931.13, effectiveRate = $3.19. Source: California Department of Insurance, Workers Compensation guide (the payroll for each classification is multiplied, per each $100 of payroll, by the rate; the sum is the base premium; then experience modification and schedule rating), https://www.insurance.ca.gov/01-consumers/105-type/95-guides/09-comm/WorkersCompensation.cfm (base premium, then experience modification and schedule rating).
3. classes = {"payroll":80000,"rate":12.5} or undefined, emr = 1, sched = 5% gives manual = $10,000.00, modified = $10,000.00, modEffect = $0.00, premium = $10,500.00. Source: California Department of Insurance, Workers Compensation guide (the payroll for each classification is multiplied, per each $100 of payroll, by the rate; the sum is the base premium; then experience modification and schedule rating), https://www.insurance.ca.gov/01-consumers/105-type/95-guides/09-comm/WorkersCompensation.cfm; Texas Department of Insurance, Texas workers’ compensation rate guide (payroll for each classification × the rate per $100 of payroll; the basic premium is the sum; Code 5551 at an LCM of 1.50 has a rate of 2.919), https://www.tdi.texas.gov/wc/regulation/rcomp.html.

## FAQ

### How is a workers comp premium calculated?

For each job class, payroll ÷ 100 × the rate per $100 of payroll; add the classes to get the manual (base) premium; then multiply by your experience modification rate and by any schedule rating. $500,000 of payroll at $2.919 per $100 is $14,595; with a 1.25 mod it is $18,243.75.

### What is the experience modification rate (EMR)?

It compares your past claims with those of similar employers. 1.00 is average. Below 1.00 (for example 0.85) is a credit that lowers the premium; above 1.00 is a debit that raises it. Your state’s rating bureau works it out and your insurer applies it.

### Where do the rates per $100 of payroll come from?

Each job class code has a rate that the insurer files with the state. In Texas, for example, the rate is the class loss cost times the insurer’s loss cost multiplier: with a multiplier of 1.50, code 5551 is $2.919 per $100. Use the rates on your quote.

### What is schedule rating?

A credit or debit, as a percent, that the insurer applies for features of your workplace that the class rate does not reflect, such as a safety program. Type a credit as a negative number: −10 is a 10% credit.

### Why are some classes so much cheaper than others?

The rate reflects the injuries and claim costs expected in that kind of work. Office work has low rates and heavy manual work high ones, so the same payroll can cost very different amounts. A business with both pays each class’s rate on that class’s payroll.

### What does the calculator leave out?

Premium discounts for large policies, expense constants, deductible credits, terrorism and catastrophe charges, and state assessments. These vary by state and insurer, so your bill can differ from the estimate.

## Sources

- California Department of Insurance, Workers Compensation (consumer guide, revised June 23, 2025): the payroll for each classification is multiplied, per each $100 of payroll, by the applicable rate to get the base premium; an experience modification under 100% reflects better-than-average experience and over 100% worse; schedule rating uses debits and credits to modify a base rate. https://www.insurance.ca.gov/01-consumers/105-type/95-guides/09-comm/WorkersCompensation.cfm (retrieved 2026-10-18)
- Texas Department of Insurance, Texas workers’ compensation rate guide (last updated March 2, 2026): the total payroll for each classification is multiplied by the company’s rate per $100 of payroll; the basic premium is the sum; an experience rating modifier and schedule rating may be applied; rate = loss cost × loss cost multiplier (code 5551 at 1.50 gives 2.919). https://www.tdi.texas.gov/wc/regulation/rcomp.html (retrieved 2026-10-18)