Workers' Comp Cost Estimator

How It Works

1. Enter Payroll by Class Code

   Input the annual payroll (gross wages) for each workers' comp class code in your company. Common construction codes include 5403 (carpentry), 5190 (electrical wiring), 5183 (plumbing), 5537 (heating/HVAC), and 8810 (clerical). If you have employees in multiple trades, add a row for each class code. Payroll should include wages, bonuses, and overtime (many states cap overtime at straight-time equivalent for WC purposes).

2. Enter Manual Rates

   Input the manual rate per $100 of payroll for each class code. These rates are set by NCCI in most states or by the state rating bureau in monopolistic states (Ohio, Washington, Wyoming, North Dakota). Your insurance broker or state WC authority can provide current rates. Rates vary dramatically by trade: clerical (8810) may be $0.20 per $100, while roofing (5551) can exceed $30 per $100.

3. Enter Your EMR

   Input your company's experience modification rate. An EMR of 1.00 means you are at the industry average for your size and classification. Below 1.00 means better than average claims history; above 1.00 means worse. New companies without three years of history are typically assigned 1.00. Your EMR is printed on your policy declarations page and on the NCCI experience rating worksheet.

4. Review Premium Estimate

   The calculator shows the estimated annual premium for each class code, the combined total, monthly payment amount, and equivalent cost per labor hour (useful for job costing). An EMR sensitivity table shows how your premium changes at different EMR levels so you can quantify the savings from safety improvements.

Built For

• Construction company owners budgeting annual insurance costs for the upcoming fiscal year
• Estimators calculating the WC component of burdened labor rates for project bidding
• Safety managers making the business case for safety program investments by quantifying EMR-driven savings
• Bookkeepers and controllers verifying insurance broker premium quotes against manual rate calculations
• New contractors estimating their first-year WC costs before hiring employees
• Multi-trade contractors comparing WC costs across divisions to understand which trades drive the highest premiums

Features & Capabilities

EMR Sensitivity Analysis

Shows a table of annual premium amounts at EMR values from 0.70 to 1.50 in 0.05 increments, based on your current payroll and class codes. Highlights the dollar savings per 0.05 EMR reduction, giving you a concrete ROI target for safety program spending.

Multi-Class Code Support

Handles companies with employees across multiple NCCI class codes. Each code has its own manual rate, and the calculator applies the EMR uniformly across all codes (as NCCI does). The breakdown shows which class codes contribute the most to your total premium.

Cost Per Labor Hour

Converts the annual premium into a per-hour cost based on the number of employees and annual hours worked. This figure plugs directly into burdened labor rate calculations for job costing and estimating.

Assumptions

• Manual rates are entered by the user and should reflect current state-approved rates. Rates change annually in most states.
• EMR is applied as a simple multiplier to the manual premium (Manual Rate x Payroll / 100 x EMR). Actual premium calculations may include schedule credits, premium discounts, expense constants, and state-specific modifiers that this calculator does not model.
• Payroll figures should reflect remuneration as defined by NCCI or the applicable state bureau. This generally includes wages, salaries, commissions, bonuses, and overtime at straight-time equivalent, but excludes tips, severance pay, and group insurance payments.
• The calculator produces an estimate, not a quotation. Actual premiums are determined by the insurance carrier based on underwriting factors beyond EMR and manual rates.

Limitations

• Does not model state-specific premium modifiers such as schedule rating credits/debits, premium discounts for large risks, or minimum premium requirements.
• Does not calculate EMR from claims history. EMR computation requires your NCCI experience rating worksheet data, including expected losses, actual incurred losses, and primary/excess loss splits. Contact your broker or NCCI for EMR calculation details.
• Does not cover monopolistic state fund states (Ohio, Washington, Wyoming, North Dakota) where premium structures differ from the standard NCCI model.
• Does not account for retrospective rating plans, large deductible programs, or self-insured retention structures used by larger contractors.
• Does not model audit adjustments. Most WC policies are audited at the end of the policy term and the premium is adjusted based on actual payroll, which may differ from the estimate.

References

• NCCI (National Council on Compensation Insurance) - Experience Rating Plan Manual and Basic Manual of Workers' Compensation and Employers' Liability Insurance. Defines class codes, manual rates, and the EMR calculation methodology for 38 states.
• State Rating Bureaus - Independent rating organizations in non-NCCI states (CA, DE, IN, MA, MI, MN, NJ, NY, NC, PA, WI) that set their own class codes and rates.
• OSHA - Injury and Illness Recordkeeping (29 CFR 1904). OSHA recordable injuries feed into the claims data used to calculate EMR.
• IRMI (International Risk Management Institute) - Workers' Compensation reference materials and class code descriptions.

Frequently Asked Questions