The primary component of workers’ compensation insurance premium is the amount of payroll paid to employees during the policy period.
In addition to estimated annual payroll for the year, we require an accurate count of every full-time and part-time employee for each location of the employer.
The following items are included as payroll (but not limited to) and subject to workers’ compensation premium calculation:
- Gross wages
- 1099 payroll payments not verified by license
- Salaries
- Commissions
- Piece work pay
- All bonuses
- Profit sharing
- Union dues
- Vacation / holiday / sick pay
- Overtime (straight time portion only)
- Market value of gifts
- Automobile allowances (less reimbursement for documented expenses)
Items excluded from payroll and not subject to workers’ compensation premium calculation include:
- Meals or lodging (unless classification includes them or unless provided in lieu of wages)
- Tips
- Overtime excess pay (the increase above the regular hourly wage)
- Severance pay (except for accrued vacation, sick pay, commissions, and bonuses)
- Employer contributions to qualified insurance, stock, or retirement plans
- Stock options
- Value of an automobile furnished to an employee
- Employee discounts for merchandise
- Meals provided at no charge at the work location
- Residual payments for commercials
- Uniform allowance
- Laundry allowance