Workers' Comp Cost for Contractors

Workers' comp premiums are driven by a formula: your payroll (per $100), a classification rate set by your state and trade, and an experience modifier (mod rate) based on your claims history. A framer and an electrician doing the same revenue can pay very different premiums because their classification codes carry different injury risk.

The classification code matters more than most owners realize — if your business is coded as general carpentry when most of your work is actually lower-risk trim carpentry, you may be overpaying. It's worth asking your agent to review the code assignment annually.

A mod rate of 1.0 is neutral. A clean claims history over a few years can bring your mod below 1.0, directly lowering your premium — sometimes 10-20%. A bad claims year can push it above 1.0 and stick with you for three years even after safety improves, since most states use a three-year rolling average.

This is why a documented safety program, proper PPE, and quick, well-managed claims handling (getting an injured worker back to light duty fast, for example) pay for themselves over time — they protect your mod rate, not just your workers.

As a rough guide, roofing and structural trades often see rates in the $15-$25+ per $100 of payroll range, while lower-risk trades like painting or administrative staff can be under $3 per $100. Multiply that rate by your payroll (divided by 100) to estimate the base premium before your mod is applied.