How much does workers comp insurance cost per employee?

The national average workers comp cost is about $1.00–$1.50 per $100 of payroll, but this varies widely by state and job classification. A clerical worker may cost $0.20–$0.50 per $100, while a roofing contractor may cost $15–$30 per $100 of payroll.

Which state has the highest workers comp rates?

Alaska, California, Montana, and New Jersey consistently have the highest workers comp rates. California alone accounts for a large share of national workers comp premiums due to its size, regulatory environment, and high medical costs.

Is workers comp required in all states?

Workers compensation is required in 49 of 50 states. Texas is the only state where it is optional for private employers, though most carry it anyway. Requirements for coverage thresholds (number of employees) vary by state.

Workers Comp Cost by State 2026 | Average Rates per $100 of Payroll

Average Workers Comp Rates by State (2026)

Workers compensation rates vary significantly by state — driven by state regulations, medical costs, litigation rates, and the mix of industries in each state. Rates are expressed as cost per $100 of payroll for a benchmark clerical classification. Your actual rate depends heavily on your specific job classification.

State	Avg Rate per $100 Payroll	Cost Tier
California	$2.25	Very High
Alaska	$2.18	Very High
Montana	$2.10	Very High
New Jersey	$1.95	High
Hawaii	$1.88	High
Connecticut	$1.76	High
New York	$1.72	High
Louisiana	$1.68	High
Illinois	$1.58	Above Average
Wyoming	$1.54	Above Average
National Average	$1.00–$1.50	Average
Texas	$1.22	Average
Florida	$1.18	Average
Georgia	$1.08	Average
Tennessee	$1.02	Average
Arkansas	$0.98	Below Average
Virginia	$0.92	Below Average
Indiana	$0.86	Low
North Carolina	$0.82	Low
Wisconsin	$0.76	Low
North Dakota	$0.68	Very Low

Note: Rates shown are benchmark averages for clerical/office classifications. Rates for high-risk trades like roofing, electrical, and trucking are typically 5–20x higher than these benchmark figures.

Why Rates Vary So Much by State

Workers comp is regulated at the state level, which means every state has its own rules, benefit structures, and pricing. Key factors that drive state-level rate differences include medical cost levels, legal environment and litigation frequency, benefit generosity (how much injured workers receive), state-specific regulations, and the distribution of industries in the state.

Monopolistic vs. Competitive States

Four states — North Dakota, Ohio, Washington, and Wyoming — operate monopolistic state funds, meaning employers must buy workers comp from the state rather than private insurers. These states tend to have more stable pricing but less flexibility. All other states have competitive markets where multiple private insurers compete for business.

Rates by Industry/Job Classification

Your specific job classification (NCCI class code) matters far more than your state for determining your actual premium. Here are example rates for common trades:

Job Classification	Rate Range per $100
Clerical / Office	$0.20 – $0.60
Retail / Sales	$0.80 – $1.80
Plumbing	$4.50 – $8.00
Electrical	$3.50 – $6.50
HVAC	$4.00 – $7.50
Carpentry / Framing	$6.00 – $12.00
Roofing	$15.00 – $30.00
Trucking / Transport	$5.00 – $10.00
Tree Trimming	$14.00 – $25.00
Landscaping	$4.00 – $8.00

Calculate Your Workers Comp Cost

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Frequently Asked Questions

How is workers comp premium calculated?

Workers comp premium = (Payroll ÷ 100) × Class Code Rate × Experience Modifier. Your payroll determines your base exposure, your class code rate reflects the risk of your type of work, and your experience modifier (EMR) adjusts the rate up or down based on your actual claims history relative to similar businesses.

Can I lower my workers comp rate?

Yes. The most effective ways are: reducing your experience modifier through fewer and less severe claims, implementing a formal safety program, creating a return-to-work program for injured employees, ensuring workers are classified in the correct (least expensive applicable) class code, and shopping your policy at renewal.

Is workers comp required for subcontractors?

Requirements vary by state, but in most states, subcontractors without their own coverage become the responsibility of the general contractor. Most GCs require subcontractors to carry their own workers comp certificate of insurance. Using uninsured subs can add significantly to your own premium.