{
  "slug": "workers-comp-premium-by-class-code",
  "title": "Workers' Comp Premium Calculator (Class Code & Mod)",
  "heading": "Workers' Comp Premium Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/workers-comp-premium-by-class-code",
  "summary": "Estimate annual workers' comp premium from payroll, class rate, and experience mod.",
  "description": "Workers' compensation premium is driven by three core inputs: payroll (in $100 units), the class code rate assigned by your state's rating bureau based on job hazard, and your experience modification factor (e-mod), which rewards or penalizes you relative to industry average loss history. The base formula is payroll divided by 100, multiplied by the class rate, multiplied by the e-mod. From there, insurers typically apply expense constants and any schedule credits or debits for safety programs. This calculator walks through that full chain so you can see exactly how a 0.85 e-mod (good loss history) versus a 1.20 e-mod (poor loss history) changes your bottom line, and how a schedule credit for safety training stacks on top of the mod adjustment.",
  "formula": "Manual premium = (payroll ÷ 100) × class rate; modified premium = manual premium × e-mod; final premium = modified premium × (1 − schedule credit) + expense constant.",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=workers-comp-premium-by-class-code",
  "inputs": [
    {
      "id": "payroll",
      "label": "Annual payroll for this class code",
      "kind": "number",
      "hint": null,
      "default": 500000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "classRate",
      "label": "Class code rate per $100 payroll",
      "kind": "number",
      "hint": null,
      "default": 4.5,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "emod",
      "label": "Experience modification factor",
      "kind": "number",
      "hint": null,
      "default": 1,
      "unit": null,
      "min": 0.5,
      "max": 2
    },
    {
      "id": "scheduleCredit",
      "label": "Schedule credit for safety programs",
      "kind": "number",
      "hint": null,
      "default": 5,
      "unit": "%",
      "min": -25,
      "max": 25
    },
    {
      "id": "expenseConstant",
      "label": "Expense constant / policy fee",
      "kind": "number",
      "hint": null,
      "default": 250,
      "unit": "$",
      "min": 0,
      "max": null
    }
  ],
  "outputs": [
    {
      "id": "finalPremium",
      "label": "Estimated annual premium",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "manualPremium",
      "label": "Manual premium (before mod)",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "modifiedPremium",
      "label": "Premium after e-mod",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "emodSavings",
      "label": "Dollar impact of e-mod",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "perEmployeeEst",
      "label": "Rough cost per employee",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Annual payroll for this class code: 500000 $",
      "Class code rate per $100 payroll: 4.5 $",
      "Experience modification factor: 1",
      "Schedule credit for safety programs: 5 %",
      "Expense constant / policy fee: 250 $"
    ],
    "outputs": [
      "Estimated annual premium: $21,625",
      "Manual premium (before mod): $22,500",
      "Premium after e-mod: $22,500",
      "Dollar impact of e-mod: $0",
      "Rough cost per employee: $1,946"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter annual payroll for this class code ($).",
      "Enter class code rate per $100 payroll ($).",
      "Enter experience modification factor.",
      "Enter schedule credit for safety programs (%).",
      "Enter expense constant / policy fee ($).",
      "Read your estimated annual premium on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "payroll": 300000,
        "classRate": 2.6999999999999997,
        "emod": 0.6,
        "scheduleCredit": 3,
        "expenseConstant": 150
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "payroll": 500000,
        "classRate": 4.5,
        "emod": 1,
        "scheduleCredit": 5,
        "expenseConstant": 250
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "payroll": 800000,
        "classRate": 7.2,
        "emod": 1.6,
        "scheduleCredit": 8,
        "expenseConstant": 400
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "What is an experience modification factor (e-mod)?",
      "a": "It's a multiplier calculated by your state's rating bureau (like NCCI) comparing your actual claims history to the expected losses for a business your size in your industry. A 1.00 mod means average; below 1.00 means better-than-average losses and lower premium; above 1.00 means worse losses and higher premium. It typically uses three years of loss history, excluding the most recent year."
    },
    {
      "q": "Why does my payroll get divided by 100?",
      "a": "Workers' comp class rates are quoted per $100 of payroll by convention across the industry, dating back to how state rating bureaus originally published rate tables. A $4.50 rate means $4.50 of premium for every $100 an employee earns in that job classification, before any mod or credits."
    },
    {
      "q": "How do I lower my workers' comp premium?",
      "a": "The two biggest levers are your e-mod (improve it by reducing claims frequency and severity over 3+ years) and correct class code assignment (misclassifying office staff under a higher-hazard code inflates cost). Schedule credits for documented safety programs, return-to-work programs, and drug testing can also shave 5–25% off premium in many states."
    },
    {
      "q": "Can class codes vary for the same business?",
      "a": "Yes. A business often has multiple class codes — for example, a general contractor might have separate codes for office staff, carpenters, and roofers, each with a very different rate. Payroll must be tracked and reported separately by class code, and misallocating payroll to a lower-rated code is a common audit finding."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/commercial-general-liability-rate",
    "https://www.revenuelab.fyi/toolbox/business-interruption-coverage"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Workers' Comp Premium Calculator (Class Code & Mod) (https://www.revenuelab.fyi/toolbox/workers-comp-premium-by-class-code)"
}