How is workers' comp premium calculated?

The standard formula is payroll divided by 100, multiplied by the class-code base rate, multiplied by your experience modification factor. So $500,000 of payroll at a $1.50 rate with a 1.0 mod gives a $7,500 base premium before discounts and fees.

What is an experience modification factor?

The experience mod, or e-mod, compares your company's loss history to others in the same classification. A mod of 1.0 is average; below 1.0 means a better-than-average claims record and a lower premium, while above 1.0 raises your cost.

Where do class-code base rates come from?

Base rates are tied to job classification codes that reflect the injury risk of the work, from low-risk clerical to high-risk roofing. In Minnesota, advisory rates are developed by the Minnesota Workers' Compensation Insurers Association and adjusted by each carrier.

Does Minnesota have a state fund?

Minnesota's workers' comp market is served by private insurers and the state-chartered State Auto/assigned-risk plan for employers who cannot find coverage. Most Minnesota employers buy from competitive private carriers rather than a monopolistic state fund.

Is this my final premium?

It is a base estimate. Your actual premium may include schedule credits or debits, expense constants, terrorism and assessment surcharges, and minimum premiums, and is finalized by an audit of your actual payroll at the end of the policy term.

Minnesota Workers' Compensation Premium Calculator

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Workers’ compensation insurance is mandatory for nearly all Minnesota employers, and premium scales with payroll and risk. This calculator estimates an annual workers’ comp premium from your payroll, class-code base rate, and experience modification factor.

How it works

The premium follows the standard rating formula used across the industry:

premium = (annual payroll ÷ 100) × class base rate × experience mod

The base rate is dollars of premium per $100 of payroll for your job classification. The experience mod adjusts that base for your own loss history — 1.0 is average, below 1.0 is a credit, above 1.0 is a surcharge.

Example

A landscaping crew with $400,000 of payroll, a $4.50 base rate, and a 0.95 experience mod has a premium of ($400,000 ÷ 100) × $4.50 × 0.95 = $17,100 a year before any schedule credits or fees.

Notes

Estimate only — not an insurance quote. Real premiums include schedule credits/debits, expense constants, assessments, and minimum premiums, and are trued up by a payroll audit at policy end. Minnesota advisory rates come from the Minnesota Workers’ Compensation Insurers Association. Get an actual quote from a licensed carrier.