The formulas
- Manual premium = sum of (payroll / 100 x class rate)
- Modified premium = manual premium x experience mod
- Premium = modified premium x (1 - schedule credit) + expense constant
How it works
Workers' compensation premium is built from payroll by classification code. Each class has a rate per $100 of payroll. The sum is the manual premium. An experience modification factor, set by a rating bureau from your loss history, scales it. A mod below 1.00 is a credit and above 1.00 a debit.
Insurers then apply schedule credits or debits and add flat charges. The result is an estimate: states add assessments and surcharges, and the final bill follows a payroll audit. Use rates and the mod from your quote or the rating bureau worksheet.
Illustrative figures only. Check the result against your firm's methodology before relying on it.
Common questions
Where do I find the mod?
The worksheet from your state rating bureau or your carrier shows it.
What payroll do I enter?
Use the payroll basis in your quote for each class code.
Why does the audit change the premium?
The estimate uses projected payroll. The audit trues it up to actual payroll and classes.
Formulas on this page are the standard definitions.
Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.