Updated 17 April 2026
Workers' Compensation Insurance Cost 2026: Rates by State and Industry
Workers comp costs $0.15 to $15.00 per $100 of payroll in 2026. Office workers are cheap. Roofers are expensive. State, industry classification code, and your claims history all drive the final number.
How Workers Comp Pricing Works
Workers comp premium is not a flat rate. It is calculated as:
Three variables. All three matter:
- Payroll: Higher payroll means higher premium. Premium grows linearly with payroll.
- Classification rate: Set by NCCI (National Council on Compensation Insurance). Roofing is 20x the cost of office work because the injury frequency and severity statistics are dramatically different.
- Experience mod: Your actual claims history versus your industry average. 1.0 is average. Clean history lowers it; claims raise it.
Rates by Job Classification Code
| Job Type | NCCI Code | Rate per $100 Payroll | Example: $500k Payroll |
|---|---|---|---|
| Office / Clerical | 8810 | $0.15-0.30 | $750-1,500/yr |
| Software Developer | 8371 | $0.20-0.40 | $1,000-2,000/yr |
| Retail Store Clerk | 8017 | $0.75-1.50 | $3,750-7,500/yr |
| Restaurant Kitchen | 9083 | $2.00-4.00 | $10,000-20,000/yr |
| Plumber / Electrician | 5183/5190 | $3.00-6.00 | $15,000-30,000/yr |
| Landscaping | 0042 | $4.50-8.00 | $22,500-40,000/yr |
| General Contractor | 5606 | $6.00-10.00 | $30,000-50,000/yr |
| Roofing | 5551 | $8.00-15.00 | $40,000-75,000/yr |
State-by-State Rate Overview
| State | Office Rate (per $100) | Restaurant Rate (per $100) | Notes |
|---|---|---|---|
| Texas | Optional | Optional | Only state where WC is not mandatory |
| California | $0.22-0.45 | $2.80-5.50 | High-cost state, independent review |
| New York | $0.28-0.55 | $3.20-6.00 | High-cost, strict enforcement |
| Florida | $0.18-0.38 | $2.20-4.50 | Competitive market |
| Illinois | $0.20-0.42 | $2.50-5.00 | Mid-range costs |
| Pennsylvania | $0.19-0.40 | $2.30-4.80 | Mid-range |
| Georgia | $0.16-0.32 | $1.90-3.80 | Below national average |
| Michigan | $0.18-0.36 | $2.10-4.20 | Mid-range |
| Ohio | State fund only | State fund only | BWC state-run monopoly |
| North Dakota | State fund only | State fund only | WSI state monopoly |
| Washington | State fund only | State fund only | L&I state fund |
| Wyoming | State fund only | State fund only | State-run monopoly |
State Fund vs Private Market
Ohio, North Dakota, Washington, and Wyoming require all employers to buy workers comp through the state fund. You cannot use a private carrier. This simplifies the process but removes competitive pricing. All other states allow private market competition.
The Experience Modification Factor Explained
The experience mod (e-mod) is a multiplier applied to your base premium based on your actual loss history compared to the average for your industry and size.
| E-Mod Score | What It Means | Effect on Premium |
|---|---|---|
| 1.0 | Average for your industry | No adjustment (baseline) |
| 0.85 | Better than average (clean history) | 15% discount on base premium |
| 1.20 | Worse than average (claims history) | 20% surcharge on base premium |
| 1.50 | Significantly above average | 50% surcharge, carriers may decline renewal |
A single serious workers comp claim can move your e-mod from 1.0 to 1.3 or higher, adding tens of thousands of dollars over three years. Preventing claims is the most cost-effective insurance strategy available.
Employee Count Exemptions by State
Most states exempt micro-businesses from mandatory WC requirements. Key thresholds:
| State | Employee Threshold for Mandatory WC |
|---|---|
| Alabama | 5+ employees |
| Arkansas | 3+ employees |
| Florida | 4+ (construction: 1+) |
| Georgia | 3+ employees |
| Mississippi | 5+ employees |
| Tennessee | 5+ (construction: 1+) |
| Most other states | 1+ employees (any employee = mandatory) |
Even if you are legally exempt, voluntary WC coverage is often wise. A single serious employee injury can bankrupt a small business without coverage.
Penalties for Non-Compliance
Operating without required WC coverage carries serious penalties. State fines range from $500 per day to $10,000+ for willful violations. In many states, business owners can be held personally liable for all medical and disability costs of injured workers. Some states require stop-work orders and public posting of non-compliance findings.
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