Workers’ Compensation Insurance Cost Calculator: See Your Rates in Seconds

Carrying workers’ compensation insurance is mandatory in most states, including Florida. Any business with four or more employees should have active coverage to comply with state laws. With that said, the cost of workers’ compensation insurance is one of the first things business owners think about, especially if it’s a small business or a startup.

In this blog post, we will explain how workers’ comp costs are calculated and how you can use a workers’ compensation insurance cost calculator in Florida to estimate your premium.

How to Calculate Workers’ Compensation Cost

The workers’ compensation calculation formula is:

Workers’ Comp Cost = (Payroll ÷ 100) × Class Codes Rate × Experience Modifier (EMR)

Each of these parts plays an important role in determining how much you pay for workers’ compensation coverage:

Payroll: Your total annual employee payroll divided by 100, because insurance companies usually calculate premiums based on every $100 of payroll.
Class Codes Rate: This rate is determined for each industry based on the level of risk associated with each type of job. For example, the class code rate for roofing or demolishing work is higher due to the increased risk exposure related to this type of work. Meanwhile, a receptionist would fall under a lower-risk class code because this work involves very minimal physical risk. This rate is determined by the National Council on Compensation Insurance (NCCI), and it can differ based on your location.
Experience Modification Rate (EMR): The experience modifier is a number that reflects how your business compares to others in your industry in terms of workplace injuries and past workers’ comp claims. A lower EMR (below 1.0) means that your business is a lower risk, which can help it get lower insurance rates. In contrast, a business with an EMR higher than 1.0 will get increased rates because it’s viewed as higher risk.

For example, if you have an annual payroll of $500,000, your class code rate is $1.50, and your EMR is 0.90, this is how you can calculate workers’ comp premium for your business:

($500,000 ÷ 100) × $1.50 × 0.90 = $6,750

So, you’ll pay an approximation of $6,750 annually for workers’ compensation insurance. However, this number isn’t final because other factors contribute to your total insurance premium, including premium modifiers, insurance company fees, state assessments, and discounts.

What Are Premium Modifiers and How Do They Affect Your Premiums?

Premium modifiers are adjustments that increase or decrease your workers’ compensation insurance base rates according to certain factors related to your business.

Some of the common premium modifiers are:

Experience Modifiers (EMR): This modifier is the most common one, and it compares your business’s workers’ compensation claims history to the claims history of similar businesses in your industry. An EMR below 1.0 means that you’re a lower risk compared to similar businesses, and if it’s above 1.0, then you’re higher risk.
Schedule Rating Modifiers: This factor allows insurance companies to apply credits or debits up to 25% based on conditions like workplace safety procedures, quality of management, employee training programs, equipment maintenance, and risk management protocols.
Premium Discounts: Larger businesses with higher premiums may qualify for discounts.
Drug-Free Workplace Credit: Several insurance companies in some states offer discounts for businesses that hold and maintain a drug-free workplace certificate.
Safety Program Credits: Insurance companies may offer discounts to businesses that implement formal safety programs.

How Much Does Workers’ Comp Pay?

Workman’s comp percentage varies by state, but it usually covers around 66.67% (two-thirds) of the employee’s average weekly wage if they’re unable to work temporarily due to a work-related injury. The exact amount depends on state limits, type of injury, and the employee’s recovery duration.

To understand how the workers’ comp payout calculator works, it’s important to break down the factors that influence your benefit amount:

Weekly Wage Replacement Rates

The weekly wage replacement rate in most states is 66.67% of the employee’s average weekly wage. For example, if a worker earns $900 per week, workers’ comp insurance would compensate them for around $600 per week if they can’t work due to a job-related injury or illness.

You can also use a workers’ compensation calculator or a workers’ comp payment calculator to estimate your workers’ comp weekly payment. Or, you can contact our team, and we would be happy to provide a more accurate estimate.

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Florida Guidelines on Temporary Total Disability (TTD)

Temporary Total Disability (TTD) benefits are provided to employees who are completely unable to work for a certain period due to a work-related injury or illness.

In Florida, workers are allowed to receive 66.67% of their weekly lost wages while recovering.
TTD benefits are available for a maximum of 104 weeks as long as the worker hasn’t already reached their Maximum Medical Improvement (MMI) before that.
If an employee has not reached Maximum Medical Improvement (MMI) within those 104 weeks, benefits may be extended up to 260 weeks (approximately five years).

Temporary Total Disability (TTD) Benefits help employees stay financially stable while they recover by covering their basic living expenses, including rent, groceries, and bills.

Florida Guidelines on Temporary Partial Disability (TPD)

If an employee is injured but can still perform a part of their job duties, they may qualify for Temporary Partial Disability (TPD) benefits.

In Florida, TPD benefits only apply if the employee earns less than 80% of their wage before the injury while working in a reduced capacity.
The benefit amount is 80% of the difference between the employee’s pre-injury average weekly wage and their current reduced wage.
The maximum compensation rate in Florida for 2025 is $1,295 per week.

Maximum and Minimum Caps

The maximum and minimum caps for workers’ compensation insurance in Florida are updated annually. For 2025, the maximum weekly compensation rate is $1,295 per week, and this cap applies to all types of benefits under a workers’ comp insurance policy.

Florida doesn’t have a minimum benefit rate, but workers who earn very low wages weekly may receive workers’ comp coverage equal to their full weekly earnings.

How to Calculate Workers’ Comp Cost per Employee or Hour

Follow these steps to calculate the cost of a workers’ compensation policy per employee or hour:

Step 1: Gather Your Key Details

You’ll need the annual projected payroll for all the employees who’ll be covered under the policy, class codes rates for each job type, and the Experience Modification Rate (EMR).

Step 2: Determine the Total Premium Cost

Use this formula to estimate your workers’ compensation premium:

(Projected Payroll ÷ 100) × Class Code Rate × EMR = Estimated Annual Premium

Step 3: Calculate the Cost Per Employee

Divide the estimated premium calculation by the number of covered employees, including your full-time employees, part-time staff, and seasonal workers if they’re covered under the policy.

Step 4: Calculate the Cost Per Hour

To calculate the cost per hour, divide the premium by the total number of hours expected to be worked annually.

The outcomes of these calculations aren’t 100% accurate because other factors can impact your premium, such as:

The premium discount factor
Minimum premium requirements
State-specific fees
Schedule rating modifiers
Additional premium charges

You can also use a workers’ comp calculator in Florida to better estimate your insurance costs.Or we can calculate it for you. Call us now on 844-435-2467!

Secure your workers’ compensation coverage today to comply with the laws and protect your employees from workplace-related risks.

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Want a Workers’ Compensation Insurance Calculator You Can Use?

You can use this free workers’ comp calculator from MyFloridaCFO to estimate benefits for Temporary Total Disability (TTD), Temporary Partial Disability (TPD), and Impairment Income Benefits (IIB). This tool can help you understand your benefits and plan ahead by providing a quick estimate based on your wages and injury status.

Smart Ways to Use a Workers’ Comp Calculator for Budgeting and Forecasting

A workers’ comp insurance calculator isn’t just useful for estimating your premium within just a few minutes; it can also help you plan your business budget and forecast future expenses.

Here’s how a Florida workers’ compensation calculator can help your business:

Estimate premiums early for the full policy period to plan ahead.
Assess hiring impact on future insurance costs.
Align your coverage with growth and expansion plans.
Prepare for rate shifts based on changing risk factors.

How Is Workers’ Comp Premium Calculated for Small Businesses?

Using a workers’ comp premium calculator is a great starting point to understand how much you’ll pay approximately and plan ahead. If your business has two or more employees, you’ll be required to carry workers’ compensation insurance to comply with state laws. The insurance premium for this policy is determined by several factors that help insurance companies evaluate risk and cost.

Below are the factors considered when your workers’ compensation premiums are calculated:

Classification Code: Each job type is assigned a class code based on risk. Higher-risk roles like construction have higher rates than lower-risk ones like office work.
Projected Payroll: Insurers calculate your premium based on every $100 of payroll you expect to pay during the policy period.
Estimated vs. Actual Payroll: Premiums are first based on your projected payroll, but final costs are adjusted after an audit compares estimates to actual figures.
Experience Modifier (EMR): This rating reflects your claims history compared to similar small businesses. A lower EMR can reduce your premium.
Minimum Premium Thresholds: Even small businesses must meet a minimum premium amount set by the insurer or state.
State-Specific Fees and Surcharges: Additional costs may apply depending on your location and industry regulations.

Why Audits and Comparing Insurance Quotes Are Important for Small Businesses

Audits: At the end of the policy period, an audit compares your estimated payroll to actual figures. This ensures your workers compensation premiums were accurately calculated, which may result in a refund or additional payment.
Insurance Quotes: Comparing multiple insurance quotes from different providers helps small businesses discover more coverage options and find competitive rates. This step helps you make informed decisions and avoid overpaying for unnecessary coverage.

Find the Best Insurance For Your Small Business

We proudly offer customized insurance solutions designed to protect your business wherever you are in Florida or Texas:

Can You Estimate Your Workers’ Comp Policy Payouts or Buyouts?

Workers’ compensation benefits are usually paid bi-weekly, but in some cases, a lump-sum buyout might be an option. A workers compensation estimate for a buyout depends on additional factors besides the standard weekly wage, such as:

Medical Expenses
Disability ratings
Future Treatments (if needed)

A worker would be eligible to receive a lump-sum buyout if:

They have a permanent partial disability and want to avoid continued administrative processes.
Both parties agree on the estimated future medical costs and lost wages.
The worker prefers financial flexibility or plans to cover long-term needs independently.

Even if your case matches any of these scenarios, you’d still need state approval to receive a buyout.

How to Calculate Workers’ Comp Wages for Injured Employees

Workers’ Comp Payout Formula

Use the following workers comp formula to estimate workers’ compensation cost or payout amounts:

Weekly wage × disability percentage × duration of benefits

You can also use a workers’ comp buyout calculator to simplify the process, especially if you’re dealing with complex cases or permanent impairment scenarios. You can determine the disability percentage by using a disability rating calculator. Insurance carriers use this data, along with your business’s loss history, class code (a four-digit number that categorizes job types), and other factors to calculate appropriate compensation for your injured worker.

What Are the Most Common Workers’ Comp Rates by Industry?

Workers’ compensation insurance rates vary by industry based on risks, injury frequency, and claim history. Insurance companies use class codes to assign a base rate per $100 of payroll. These rates reflect the risk level associated with each job type.

In the table below, you can find some of the common classification codes and how risk levels affect insurance premiums:

Industry / Job Role	Class Code	Risk Level	Estimated Rate (per $100 of payroll)
Office Clerical	8810	Low Risk	$0.25 – $0.50
Retail Store Employee	8017	Low to Moderate	$0.90 – $1.30
Landscaping & Gardening	0042	Moderate	$3.00 – $5.00
Residential Construction	5645	High Risk	$10.00 – $15.00
Roofing	5551	Very High Risk	$20.00 – $30.0
Plumbing	5183	Moderate	$5.00 – $7.00
Restaurant Staff (Full-Service)	9079	Moderate	$2.50 – $4.00

You can also use a workers’ comp rate calculator to look up class codes and estimate your premium.

High-Risk VS Low-Risk Jobs:

High-Risk Jobs: Roofers, construction workers, and demolition crews pay higher premiums because their jobs include several risks, such as exposure to falls, heavy equipment, and dangerous materials.
Low-Risk Jobs: Meanwhile, office administrators, tech professionals, and consultants generally have lower workers’ comp rates because they work in safer environments.

How to Calculate Workers’ Comp for Part-Time Employees?

Follow these steps to calculate workers compensation insurance for part-time employees:

Estimate the part-time employee’s annual payroll.
Divide that payroll by 100.
Multiply by the class code rate (based on the job type).
Multiply by your experience modification rate (EMR).

You can also use a workmen’s compensation calculation tool to skip doing the math yourself and get accurate results. However, for the most accurate result, call the Florida Insure team to request a quote.

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How Can I Reduce the Cost of Workers’ Compensation Coverage?

Worksite Safety Training: Invest in worksite safety training to help your employees avoid work-related injuries.
Return-to-Work Programs: This one requires some creativity, but it’ll help you reduce the costs of claims. You can offer light-duty tasks to injured workers so they can return to work sooner with reduced wages based on their tasks or working hours.
Accurate Classification Codes: Ensure that each employee is assigned to their correct class code to avoid unnecessary costs.
Onsite Clinics: If possible, you can set an onsite clinic or partner with a nearby provider. This will ensure prompt treatment for minor injuries, which can reduce claims and lower your premiums over time.
Compare Insurance Quotes: Compare insurance quotes from different companies using a workers comp net rate calculator to find the right coverage for your business.
Lower Your EMR: Focus on workplace safety to improve your experience modifier rate over time.

FAQs

What is the formula to calculate workers’ comp?

The formula to calculate workers’ comp is:

Workers’ Comp Cost = (Payroll ÷ 100) × Class Codes Rate × Experience Modifier (EMR)

Where the classification code rate is a rate assigned based on the risk level of each job, and EMR is a number (usually between 0.75 and 1.25) that adjusts your rate based on your company’s past claims history.

How to calculate part-time employee coverage?

The same formula you use for full-time employees applies to part-time employees:
(Payroll ÷ 100) × Class Code Rate × EMR.

Just use the part-time employee’s projected payroll in the calculation. You can also use a workers’ comp net rate calculator for more accurate results.

What if my EMR is higher than 1.0?

If your EMR is higher than 1.0, it means your business has more claims or risks than other similar businesses. This also means that you’ll get higher insurance premiums for your workers’ compensation coverage.

What are common mistakes in calculating premiums?

Common mistakes include:

Misclassifying employees under the wrong class code,
Underestimating payroll
Ignoring the impact of your EMR
And not considering additional modifiers like state fees or schedule rating adjustments.

Do I need workers’ comp if I’m self-employed?

No, you only need workers’ comp if you own a business with more than one employee.

Do I need workers’ comp for 1 employee in Florida?

Yes, if you own a business with more than one employee (including yourself), then you need workers’ compensation insurance to protect yourself and your employees from work-related injuries. However, for construction businesses, workers’ comp might be required with just 1 employee.

Do you get 100% pay for workmans’ comp?

No, workers’ compensation doesn’t pay 100% of your regular wages. In most states, including Florida, it pays about 66.67% of your average weekly wage if you’re temporarily unable to work. Some benefits, like medical expenses, are covered in full, but wage replacement is partial. However, the employee might be eligible for more if their weekly wage is very low.

Which body part has the highest value in a workers’ compensation claim?

Head and brain injuries are the highest-value claims in workers’ compensation cases. They can lead to permanent disability, costly medical care, and long-term loss of income, which causes increased payout amounts.