How is a California workers' comp premium calculated?

Premium equals payroll divided by 100, multiplied by the classification code base rate, multiplied by your experience modification factor. So a $500,000 payroll at a $3.50 rate and 1.0 mod costs (500,000 ÷ 100) × 3.50 × 1.0 = $17,500 a year.

What is a classification code base rate?

Every job type has a class code with a published rate per $100 of payroll reflecting its injury risk. Clerical work carries a low rate (under $1), while roofing or construction can exceed $15 per $100, so your industry drives most of the cost.

What is an experience modification factor?

The experience mod (X-mod) compares your past claims history to others in your class. A mod of 1.0 is average; below 1.0 means a safer-than-average record that lowers premium, and above 1.0 raises it. New or small employers usually start at 1.0.

Does California use a state fund or private carriers?

Both. California employers can buy coverage from private insurers or from the State Compensation Insurance Fund (State Fund), the insurer of last resort. Rates are advisory in California, so carriers set their own rates and your quote can vary between them.

Is this my exact premium?

No. It is a manual estimate. Real premiums also reflect schedule rating credits/debits, minimum premiums, multiple class codes, and carrier-specific pricing, so always get a formal quote. Use this to budget and compare carriers.

California Workers' Compensation Premium Calculator

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Workers’ compensation is a major payroll cost for California employers, and the math behind it is more predictable than it looks. This calculator applies the standard premium formula — payroll, classification rate, and experience modifier — so you can budget your annual cost or sanity-check a carrier’s quote.

How it works

Premium is built from three inputs: how much you pay in wages, how risky the job is, and your own claims history:

manual premium   = (annual payroll ÷ 100) × class-code base rate
modified premium = manual premium × experience modification factor

The classification code rate is expressed per 100 dollars of payroll and reflects the injury risk of the job — clerical roles are cheap, construction and roofing are expensive. The experience modifier (X-mod) scales the premium up or down based on whether your past claims are better or worse than average for your class.

Example

A 500,000 payroll under a class code rated 3.50 per 100 with an experience mod of 0.95: the manual premium is (500,000 ÷ 100) × 3.50 = 17,500, and the modified premium is 17,500 × 0.95 = 16,625.

Notes

California rates are advisory, so private carriers and the State Compensation Insurance Fund each set their own pricing — shop multiple quotes. Real premiums also reflect schedule rating credits/debits, minimum premiums, and multiple class codes for mixed workforces, so treat this as a budgeting estimate, not a binding quote.