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06: Workers’ Comp: Calculating and Paying Premiums

With Monthly Self Reporting, we’ll need to calculate your premiums each month so that we can pay your carrier the right amount. 

What you'll need: A list of all your workers, their pay, their hours worked, the class codes they are assigned and a calculator or spreadsheet program.

What counts as payroll for calculating premiums

The first step is to figure out what counts towards your total payroll number each month. The following types of payment are included:

  • Gross wages
  • Salaries
  • Commissions
  • All bonuses
  • Most profit sharing
  • Vacation, holiday and sick pay
  • Overtime (“straight time” portion only, so if someone normally earns $10 but works 2 hours overtime at $15, you just record it as 2 hours at $10 for the purposes of workers' comp.)
  • The market value of gifts
  • Automobile allowances (less reimbursement for documented expenses)

The following items are excluded from payroll:

  • Meals or lodging (unless the classification phraseology specifically includes them or they are provided in lieu of wages)
  • Tips
  • Overtime excess pay (the increase above the regular hourly wage)
  • Severance pay (except for accrued vacation, sick pay, commissions and bonuses)
  • Employer contributions to qualified insurance, stock or retirement plans
  • Stock options
  • The value of an automobile furnished to an employee
  • Employee discounts for merchandise
  • Residual payments for commercials
  • A uniform allowance

Note: Business owners and executives are typically excluded.

Once you have added up all the wages that are considered payroll for your workers' comp premium, the next step is to go to the Hourly app and click Workers Comp along the left and open the Payments tab.  

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Adding your payroll

For each class code in the current reporting period, click $0.00 and enter the payroll amount, then click Save. Each worker should be assigned one default class code that matches the work they typically do. 

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Once you’ve entered your payroll total for all your workers, you can see your total net premium at the bottom. The net premium also appears next to the reporting period. 

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Paying your premium

To pay the premium, click the Pay button. 

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In the popup that opens, make sure that your premium amount is correct. Then choose the bank account you’ll be using to pay the premium, and the date when you’d like us to pay it. When finished, click Confirm.

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Your payment will go into our queue, and you'll see Submitted under the reporting period. We typically pay carriers every business day at 10:30 am Pacific time. Until then, you can click Undo Payment if you need to make any changes. 

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Once your payment goes through, you’ll see Complete under the reporting period.  

That's it! 

  

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