How is the Workers Compensation rate generally charged to employees?

The Workers Compensation rate is generally charged based on every $100 of payroll. This method is commonly used because it allows for a direct correlation between the amount of payroll and the potential risk associated with the employees' work. As payroll increases, the associated risk and potential injury claims can also rise, making this a logical choice for determining the premium amount.

By using a per $100 payroll basis, insurance providers can more accurately estimate the total premium required to cover the risk represented by the number of employees and their respective wages. This approach ensures that businesses pay their premium in a manner that is proportional to the size of their workforce and the associated liabilities for injuries or illnesses that may arise from their operations.

In contrast, charging by total revenue or employing a fixed annual premium does not account for the fluctuating nature of payroll and the corresponding risk, while the per $1,000 of payroll approach is less common and can create misunderstandings regarding how premiums align with actual payroll expenses.