A:  Workers Compensation Insurance is determined by your business’s actual payroll.  At the beginning of the term or at the time of your insurance application, you estimate your payroll for the upcoming year. At the end of the term, your payroll is audited to determine what your actual payroll was for the year. If it is more than what you estimated, you will owe more.  On the flip side, if your payroll is less than what you estimated, then you will be credited the difference.  

There are different payroll class codes that have specific rates.  For example, a clerical worker will be rated differently than a truck driver or an electrician.  It is important to keep each employee’s payroll separated by job description to ensure you are being rated properly.