How is a workers' comp premium calculated?

The standard formula is (annual payroll ÷ 100) × class code base rate × experience modifier. Workers' compensation is rated per $100 of payroll, so a $50,000 payroll with a $2.00 rate and no modifier costs about $1,000 a year.

What is the class code base rate?

Each job type has a classification code with its own rate reflecting injury risk. Clerical work might rate under $0.30 per $100 of payroll, while roofing can exceed $20. You will find your code's rate on your insurer's quote or rate filing.

What does the experience modifier do?

The experience modification factor (mod) adjusts your premium up or down based on your claims history versus similar businesses. A mod above 1.00 means worse-than-average claims and raises premium; below 1.00 lowers it. New employers usually start at 1.00.

Does Alaska use a state fund or private carriers?

Alaska is a competitive private-market state for workers' comp, not a monopolistic state-fund state. Employers buy coverage from private insurers, and rates are filed and regulated by the Alaska Division of Insurance.

Is workers' comp required for all Alaska employers?

Generally yes. Alaska requires nearly all employers with one or more employees to carry workers' compensation insurance. There are limited exemptions, so check with the Alaska Workers' Compensation Division for your situation.

Alaska Workers' Compensation Premium Calculator

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Workers’ compensation insurance in Alaska is priced using the same per-$100-of- payroll method used nationwide, but with rates filed for the Alaska private market. This calculator estimates your annual premium for a single classification code from your payroll, the code’s base rate, and your experience modification factor.

How it works

Premium is built from three numbers:

premium = (annual payroll / 100) × class code base rate × experience modifier

Payroll is divided by 100 because workers’ comp rates are quoted per $100 of wages. The base rate reflects the injury risk of the job class, and the experience modifier (mod) scales the result by your own claims history — above 1.00 for worse-than-average, below 1.00 for better.

Example and notes

A construction crew with $200,000 of payroll, a class rate of $8.50 per $100, and a mod of 1.05 has an estimated premium of (200000 ÷ 100) × 8.50 × 1.05 = $17,850 a year. A clerical office with the same payroll but a $0.25 rate and a 1.00 mod pays just $500. Alaska is a competitive-market state, so shop multiple private carriers, and remember a business with several job types sums the premium across each classification code. This is an estimate — your insurer’s quote may add expense constants, schedule credits, and assessments.