How is a workers' comp premium calculated?

Premium is the classification base rate per $100 of payroll, times total payroll divided by 100, times your experience modifier. Discounts and an expense constant adjust the final figure. So premium = (rate × payroll / 100) × mod, then apply adjustments.

What is an experience modifier (mod)?

The experience modifier compares your business's claims history to others in the same class. A mod of 1.00 is average. Below 1.00 means fewer claims than expected and lowers premium; above 1.00 means more claims and raises it. New businesses usually start at 1.00.

Does Maryland use a state-set workers' comp rate?

Maryland is an NCCI state where private insurers file rates based on classification codes. There is no single state rate. Premiums vary widely by class code, from under $0.20 per $100 for clerical work to over $20 per $100 for high-risk trades like roofing.

Is workers' comp insurance mandatory in Maryland?

Yes. Maryland law requires nearly all employers with one or more employees to carry workers' compensation insurance. Coverage can be bought from a private carrier or, for hard-to-insure employers, the Chesapeake Employers' Insurance Company (the state fund).

Why is this only an estimate?

Real premiums also factor in payroll audits, schedule rating credits or debits, minimum premiums, multiple class codes, and assigned-risk surcharges. This tool models the core formula so you can size your cost, but get a quote for the exact figure.

Maryland Workers' Compensation Premium Calculator

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Workers’ compensation premium in Maryland is driven by your job classification code rate, your total payroll, and your experience modifier. This calculator applies that core formula and lets you layer in a discount and expense constant.

How it works

The base premium uses the classification rate, which is quoted per $100 of payroll:

basePremium = (classRate × payroll) / 100

That base is then adjusted by your experience modifier (mod), where 1.00 is average, below 1.00 is a credit, and above 1.00 is a debit:

modifiedPremium = basePremium × mod

Finally, a premium discount percentage (for larger policies) and a flat expense constant are applied:

finalPremium = modifiedPremium × (1 − discount) + expenseConstant

The effective rate is the final premium divided by payroll, expressed per $100.

Example

A landscaping employer with $500,000 payroll, a class rate of $6.00 per $100, a mod of 1.10, no discount, and a $200 expense constant: base is (6 × 500000)/100 = $30,000; modified is $33,000; final is $33,200, an effective rate of about $6.64 per $100 of payroll.

Notes

Maryland uses NCCI classification codes filed by private insurers, so rates vary enormously by occupation. Hard-to-place employers can use the state fund, Chesapeake Employers’ Insurance. This estimate excludes minimum premiums, schedule rating, and multi-class splits, so request a formal quote for the exact number. Coverage is mandatory for nearly all Maryland employers.