How Workers Compensation Is Calculated

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How Workers Compensation Is Calculated
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• A form of insurance that pays workers should they
  injure themselves at work or become disabled as a
  result of their job, workers compensation plans
  offer coverage of medical fees related to those
  injuries, and when an employee accepts the
  insurance coverage, they waive their right to sue
  their employer.
• A legal requirement in the majority of states
  throughout America, many companies choose to
  engage with a payroll service to help them select
  the most comprehensive workers compensation
  insurance policy. Not only can working with them
  help you narrow down your options, but it can
  also ensure that you have the maximum coverage,
  at a minimum cost.

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• However, while seeking professional assistance to
  choose the right policy is recommended, it is
  sensible to have a basic understanding of how the
  cost of coverage is calculated
• Calculating the cost of workers comp insurance
  per employee
• Firstly, you need to establish what class code
  your employee falls under
• Based upon the nature of the industry your
  business is involved in, class codes are set
  either by your state workers comp agency, or by
  the National Council on Compensation Insurance.

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• Work duties and the level of risk involved in the
  job are what class codes will ultimately be based
  upon, and experts examine data from each class
  code including data surrounding workplace
  injuries and previous claims to help them
  decide upon a rate.
• To discover your class code, youll need to think
  about what products services and/or products you
  sell, the types of tasks your employees are
  expected to carry out, and whether there are
  contractors or subcontractors that also require
  coverage.

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• Secondly, youll need to find out the premium
  rate for the employees class code
• Rates are given in dollars and cents for every
  100 of payroll for each class code, and while
  you can ask for the rates of a variety of workers
  compensation insurance providers, it makes much
  more sense to have a payroll services provider do
  that for you. Getting the best price typically
  entails making inquiries with many different
  providers, and this can be both time consuming
  and confusing. Engaging with a third party,
  however, alleviates a lot of the work and helps
  you make sense of the options.

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• Lastly, you must calculate your annual payroll
  for every employee and do some sums
• Without a clear understanding of your payroll
  numbers, youll struggle to calculate the cost of
  workers comp per employee, but if youre already
  working with a payroll provider, theyre in the
  best position to carry out such calculations for
  you. Full and part time employees, along with
  temporary or seasonal workers must be taken into
  account.
• At the end of the annual policy, your final
  workers comp rate can be adjusted to account for
  initial over, or under-estimated payroll
  projections.

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• When you have determined the annual payroll for
  each employee or at least an estimated figure
  divide that number by 100 and multiply it by the
  premium rate for the class code, to give you the
  total cost of workers comp for that employee.
• Other factors will also determine the total cost
  of workers comp
• The steps above will help you arrive at a rough
  estimate of the cost of insurance for each
  employee, but to get a more accurate figure,
  youll need to account for other factors such as
  how many employees you have and where your
  business is located.

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• Why not simplify workers compensation insurance
  by liaising with a payroll service provider, who
  will take care of every aspect for you, and get
  you the very best coverage, at the very best
  price.
• Apollo Payroll is one of the premier small
  business payroll companies in Miami Beach and
  Coral Gables. Apollo Payroll is dedicated to
  delivering expert advice, responsive service, and
  highly accurate payroll processing and reporting
  to ensure the success and growth of the business
  that we serve. Our services include comprehensive
  payroll service in Miami and other cities in
  Miami-Dade County, employee background check and
  group health insurance in Coral Gables Miami.