Workers’ Compensation premium is based on the overall payroll and any other remuneration paid out during the policy period. Premium is calculated on every $100 of payroll or remuneration multiplied by the rate charged within each classification associated with the policy. Listed below are various items that are included or excluded when determining the total payroll / remuneration for the premium calculation. The list was extracted from the NCCI Basic Rules manual and contains the most common inclusions and exclusions. Any other items will be determined during the final audit process. Note: The final premium due will be determined at the completion of your final audit.


Inclusions of payroll / remuneration

  1. Gross payroll for all employees. This is the amount before any deductions are made and will include items listed below.
    1. Pay for holidays, vacations, or illness
    2. Pay for idle time
    3. Commission payments
    4. Salary deductions due to employee paid retirement or cafeteria plans
    5. Bonus payments
    6. Corporate officer wages (subject to state minimum / maximum limits), refer to table below
  2. Fair market value of house
  3. Non-business expense reimbursements
  4. Uninsured subcontract or contract labor used for your business operations
  5. Sole proprietor / partner draws and / or wages paid (If elected to be included in coverage) (subject to state limits), refer to the table below


Exclusions of payroll / remuneration

  1. Tips received by employees as reported on the federal form 941 quarterly filings
  2. Premium overtime wages (i.e. an employee is paid $10/hour regular time and $15/hour for overtime. The extra $5/hour can be excluded and only the $10/hour paid included)
  3. Payments by an employer to a group insurance or group pension plan for employees
  4. Dismissal or severance payments except for time worked or vacation accrued
  5. Verifiable expense reimbursements incurred as a valid business expense
  6. Work uniform allowance
  7. Sick pay or disability pay paid to an employee by a third party such as an employer’s group insurance carrier
  8. Employer contributions to employee benefit plans
    1. Employee saving plans
    2. Retirement plans
    3. Cafeteria plans
    4. Health savings and flexible spending accounts

Note: Officer / Owner exclusions can vary from state to state. Please review with your agent.

ARKANSAS (eff 07/01/19)

Minimum Annual Payroll

Maximum Annual Payroll

Sole Proprietor, Partners, & LLC

$42,500

$42,500

Corporations

$41,600

$171,600

LOUISIANA (eff 06/01/19)

Minimum Annual Payroll

Maximum Annual Payroll

Sole Proprietor & Partner

$46,100

$$46,100

Corporation & LLC

$46,800

$140,400

MISSISSIPPI (eff 05/01/19)

Minimum Annual Payroll

Maximum Annual Payroll

Sole Proprietor, Partners, & LLC

$38,000

$38,000

Corporations

$39,000

$124,800

MISSOURI (eff 01/01/19)

Minimum Annual Payroll

Maximum Annual Payroll

Sole Proprietor, Partners, & LLC

$42,300

$42,300

Corporations

$42,300

$42,300

NEBRASKA (eff 02/01/19)

Minimum Annual Payroll

Maximum Annual Payroll

Sole Proprietor, Partners, & LLC

$43,200

$43,200

Corporations

$44,200

$171,600

OKLAHOMA (eff 01/01/19)

Minimum Annual Payroll

Maximum Annual Payroll

Sole Proprietor, Partners, & LLC

$45,100

$45,100

Corporations

$44,200

$182,000

TENNESSEE (eff 03/01/19)

Minimum Annual Payroll

Maximum Annual Payroll

Sole Proprietor, Partner & LLC (Construction)

$48,300 ($23,400)

$48,300 ($71,240)

Corporations (Construction)

$49,400 ($23,400)

$192,400 ($71,000)

TEXAS (eff 07/01/19)

Minimum Annual Payroll

Maximum Annual Payroll

Sole Proprietor & Partners

$60,970

$60,970

Corporations & LLC

$7,800

$62,400

The following is NOT reported:

  1. Tips received by employees;
  2. Subcontractors (contract labor) who have provided you with a Certificate of Insurance;
  3. Dismissal or severance pay except for time worked or accrued vacation;
  4. Payments for active military duty;
  5. Extra pay for overtime:  books and records must be maintained to show overtime extra pay separately by employee.  For example, an employee's regular hourly wage is $10.00 per hour and his overtime wage is $15.00, your records should show total hours worked x $10 as regular pay (payroll to report) and overtime hours x $5 as overtime extra pay (payroll not reported); and
  6. Owners (i.e. Sole Proprietor, Partners, Corporate Officers with 10% or more ownership) who elect not to be covered for workers' compensation.
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