The e-mod is a three-year echo of every claim
Your experience modifier recalculates annually using three years of claims history (excluding the most recent year). A 1.25 mod means 25% surcharge on EVERY dollar of premium for years. Small medical-only claims are often worth paying out of pocket where state rules allow, since the mod punishes frequency more than severity. Safety programs, return-to-work plans, and fast claim reporting are the long-term levers.
- • Owners/officers can often opt out of coverage on themselves (state-specific) to cut premium.
- • Pay-as-you-go billing smooths cash flow vs the annual deposit + audit true-up.
- • Misclassifying a roofer as clerical is audit fraud — penalties plus back premium.
Related guides
Long-form playbooks on the same topic, written by the RevenueLab editorial team.
FAQ
How much does workers' comp insurance cost?
It depends almost entirely on class code: office employers pay roughly $0.30–0.50 per $100 of payroll (≈$300–500/yr per employee), restaurants $1–2.50, and construction trades $5–20+. Multiply the rate by payroll and your experience mod.
Is workers' comp required?
In almost every state once you have employees — thresholds vary (any employee in most states; 3–5 in some). Texas is the notable opt-out state. Sole proprietors with no employees generally aren't required to carry it, though clients often demand certificates anyway.
What is an experience modification rate?
A multiplier comparing your actual losses to expected losses for your industry over a 3-year window. 1.00 is average, 0.80 earns a 20% credit, 1.30 adds a 30% debit. It's calculated by NCCI (or your state bureau) and follows the business, not the policy.
How this calculator is built
Independently maintained
Written by Sam Doshi and the RevenueLab editorial team. We don't sell the data feeds this tool is built on.
Sourced from primary data
Benchmarks come from public AdSense / Stripe / IRS disclosures and reader-submitted data — never third-party "$X per view" claims. Full methodology.
Last editorial review
Reviewed on a rolling quarterly cycle. Dated reviews are published on the methodology record for each calculator.
Editorial standards
See our editorial policy and disclaimer. Results are estimates, not advice.