Workers Compensation Rate Calculator
Workers compensation insurance premiums are calculated using the NCCI standard formula adopted by most US states. The base calculation multiplies your covered payroll (in units of $100) by the classification rate for each job category, then adjusts for your company's claims history using the experience modification rate (EMR). This calculator allows you to enter up to three employee classifications, your EMR, and any applicable credits or debits to produce a premium estimate.
NCCI workers compensation premium formula
Manual Premium = (Payroll / 100) x Class Rate (for each class, summed)
Standard Premium = Manual Premium x EMR
Final Premium = Standard Premium x (1 + Schedule Credit/Debit %)
The NCCI is the licensed rating bureau that develops class codes and rates used by most states. Some states (California, New York, Texas, New Jersey, and others) have independent rating bureaus. Always verify your state's specific class code rates with the applicable bureau.
Common workers compensation class codes
- 8810 (Clerical Office): Very low risk. Approximate rate: $0.15 to $0.30 per $100 payroll.
- 8742 (Outside Sales): Low to moderate risk. Approximate rate: $0.50 to $1.50 per $100 payroll.
- 5645 (Carpentry, residential): Moderate to high risk. Approximate rate: $5 to $12 per $100 payroll.
- 5551 (Roofing): High risk. Approximate rate: $15 to $35 per $100 payroll.
- Actual rates vary by state and insurer. Contact NCCI or your state's rating bureau for current approved rates.
Frequently asked questions
How is workers compensation premium calculated?
The National Council on Compensation Insurance (NCCI) standard formula is: (Payroll / 100) x Class Rate x Experience Modification Rate (EMR). The payroll is divided by 100 because class rates are expressed per $100 of payroll. The EMR adjusts for your company's claims history relative to the industry average.
What is a workers compensation class code?
Class codes (or classification codes) are four-digit codes assigned by NCCI that categorize the type of work employees perform. Each code has a corresponding base rate per $100 of payroll. An office clerical worker (8810) typically has a very low rate (around $0.15 to $0.30), while a roofer (5551) may have rates of $30 or more per $100 of payroll.
What is the experience modification rate (EMR)?
The EMR, also called an e-mod or mod, compares your company's actual claims losses to the expected losses for your industry and payroll size. An EMR of 1.00 is average. An EMR below 1.00 (e.g., 0.85) means your claims are better than average and you receive a discount. An EMR above 1.00 means higher-than-average claims and a surcharge.
Is workers compensation insurance mandatory?
Workers compensation insurance is required in all US states for most employers with one or more employees. The requirements, benefits, and administration vary by state. Texas is the only state where most private employers can opt out of the state workers comp system, though doing so carries significant legal risk.
What does workers compensation cover?
Workers compensation covers medical treatment costs, wage replacement during recovery (typically 66.67 percent of the worker's average weekly wage), vocational rehabilitation, and death benefits for dependents. It is a no-fault system: employees give up the right to sue for negligence in exchange for guaranteed benefits regardless of fault.
Official sources
- NCCI: Workers Compensation Premium Calculation.
- U.S. Department of Labor: Workers Compensation Overview.
- NAIC: Workers Compensation Insurance Information.
Reviewed by the CalculatorHub team, edited by James Graham, 14 June 2026. See our methodology.