Workers' Comp Cost Guide 2026
Rates by industry class code, state-by-state comparisons, and how to lower your EMR
$1.75
Avg per $100 payroll (all industries)
$0.75–$2.74
National median range
0.80
Good EMR (20% discount)
Updated June 2026 Sources: NCCI, WCRI, Insurance Information Institute Reviewed by: CostPrism Research Team
Workers' compensation insurance premiums are calculated as rate × payroll / 100. The rate varies by industry class code, state, and your company's claims history (EMR). For a 10-person construction business with $500,000 in payroll, workers' comp can cost $10,000–$60,000/year depending on the type of work. Understanding class codes and EMR is the key to managing this significant business expense.
Workers' Comp Rates by Industry
Rates shown per $100 of payroll. Annual cost shown for $100,000 payroll example.
| Industry | Class Code | Rate Range |
|---|---|---|
| Clerical / Office Workers | 8810 | $0.12–$0.30 |
| Retail Store (general) | 8017 | $0.80–$1.80 |
| Restaurant / Food Service | 9082 | $1.50–$2.80 |
| Landscaping | 0042 | $4.50–$8.00 |
| Plumbing / HVAC Contractor | 5183 | $3.50–$6.50 |
| Carpentry (residential) | 5645 | $7.00–$14.00 |
| Roofing (residential) | 5551 | $15.00–$35.00 |
| Electrical (residential) | 5190 | $3.00–$6.00 |
| Trucking / Delivery | 7231 | $5.00–$9.00 |
| Logging / Timber | 2702 | $15.00–$30.00 |
| Health Care (office-based) | 8832 | $0.50–$1.00 |
| Manufacturing (light) | 3559 | $2.00–$4.50 |
| Construction (general) | 5606 | $5.00–$12.00 |
| Warehouse / Storage | 8292 | $2.00–$4.00 |
Workers' Comp Rates by State
| State | Avg Rate | State Fund? |
|---|---|---|
| California | $2.45/$100 | No |
| New York | $2.65/$100 | No |
| Texas | $1.25/$100 | No |
| Florida | $1.85/$100 | No |
| Illinois | $1.92/$100 | No |
| Pennsylvania | $1.72/$100 | No |
| Ohio | $0.98/$100 | Yes (BWC) |
| Washington | $1.45/$100 | Yes (L&I) |
| Wyoming | $1.38/$100 | Yes |
| North Dakota | $1.08/$100 | Yes (WSI) |
| Georgia | $1.35/$100 | No |
| Michigan | $1.55/$100 | No |
| Colorado | $1.68/$100 | No |
| Arizona | $1.42/$100 | No |
| Minnesota | $1.62/$100 | No |
Monopolistic fund states (OH, WA, WY, ND) require coverage through the state fund — no private insurer option.
6 Ways to Lower Your Workers' Comp Premiums
1
Implement a formal written safety program
OSHA-compliant safety programs with documented training logs, incident investigations, and quarterly audits reduce claim frequency 20–30%. Many carriers offer 5–15% discounts for documented programs.
2
Establish a return-to-work / transitional duty program
Getting injured workers back in modified duty roles reduces total claim cost by 30–50%. An employee receiving wages (even light duty) stops collecting indemnity benefits, cutting the largest component of most claims.
3
Audit your class codes every year
Misclassified workers (e.g., office staff coded as construction workers) are the most common source of overpayment. Request a classification audit from your agent or carrier. Corrections apply retroactively.
4
Challenge incorrect claims early
Contest fraudulent or questionable claims within the reporting window (typically 10–30 days). Each claim affects your EMR for 3 years. One large claim can raise your EMR from 1.0 to 1.4, increasing premiums 40%.
5
Use pay-as-you-go workers' comp
Pay premiums based on actual bi-weekly or monthly payroll rather than estimated annual payroll. Eliminates large deposits and avoids audit adjustments. Offered by Gusto, ADP, and most major carriers.
6
Shop carriers every 2–3 years
Workers' comp rates vary 15–30% between carriers on identical risks. Using an independent broker who shops 5+ markets annually is the single easiest way to reduce costs without changing operations.
Estimate Your Workers' Comp Cost
Calculate annual workers' comp premiums by industry, payroll, and state.
Use Workers' Comp Calculator →Frequently Asked Questions
Workers' compensation averages $0.75–$2.74 per $100 of payroll across all industries. For a 10-person business paying $50,000/employee ($500,000 total payroll), average cost is $3,750–$13,700/year. High-risk industries (roofing, logging, structural steel) pay $15–$35 per $100 of payroll. Low-risk office workers pay $0.12–$0.30 per $100.
Workers' comp is required in 49 states (Texas is the exception, where it's optional but most large contractors require it). Requirements vary: most states require coverage once you have 1 employee. Some states exempt very small employers (under 3–5 employees) or certain industries (agriculture, domestic workers). Sole proprietors and partners are typically excluded but can opt in. Penalties for non-compliance include fines of $1,000–$10,000/day plus personal liability for injured workers' costs.
Key factors: (1) Industry classification code (NCCI class code) — the most important factor; (2) Total payroll — premium = rate × payroll / 100; (3) Experience modification rate (EMR/X-mod) — companies with fewer claims than industry average get a credit mod below 1.0, reducing premiums by 20–40%; (4) State — rates are state-regulated and vary significantly; (5) Safety programs — implemented safety plans can reduce premiums 5–15%.
The Experience Modification Rate (EMR or X-Mod) compares your company's actual claims to the industry average for your payroll size. EMR of 1.0 = industry average; 0.80 = 20% fewer claims than average (premium discount); 1.25 = 25% more claims (premium surcharge). EMR is calculated using 3 years of claims data. Lowering your EMR from 1.25 to 1.0 saves 20% on premiums. EMR only applies once your payroll exceeds the state threshold (typically $5,000–$10,000 in premium).
Top strategies: (1) Implement a formal safety program — documented training and inspections reduce claim frequency by 20–30%; (2) Return-to-work program — transitional duty after injury reduces total claim cost by 30–50%; (3) Accurate classification codes — misclassified workers in higher-rated codes cost you money; audit annually; (4) Self-insurance or group self-insurance — available in most states for companies with $500K+ in premium; (5) Pay-as-you-go workers' comp — avoids large deposits and adjusts to actual payroll; (6) Shop carriers every 3 years — rates vary 15–30% between carriers on same risk.