Updated: July 3, 2025
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Workers' comp insurance costs range from $3 to $412 monthly, depending on your industry and state.
Your workers' comp insurance premium depends on industry classification, claims history, annual payroll and location.
You can get cheaper workers' comp insurance by paying annually, bundling policies, getting multiple quotes and verifying your classification codes.
Workers’ compensation insurance costs small businesses an average of $36 per month, though rates range from $3 to $412, depending on your industry and location. Our analysis of quotes for businesses with two employees, a $150,000 annual payroll and existing coverage provided these rates.
Your actual premium depends on multiple factors. We'll break these down and show you how rates differ across industries and states.
The cost of workers' comp insurance varies between industries. MoneyGeek analyzed 79 industries and found that average premiums range from $3 monthly for speech therapists to $412 for roofing contractors.
| Accountants | $10 | $121 |
| Ad Agency | $8 | $94 |
| Auto Repair | $75 | $901 |
| Automotive | $58 | $693 |
| Bakery | $26 | $317 |
| Barber | $7 | $83 |
| Beauty Salon | $7 | $86 |
| Bounce House | $20 | $238 |
| Candle | $20 | $238 |
| Cannabis | $41 | $495 |
| Catering | $36 | $436 |
| Cleaning | $24 | $288 |
| Coffee Shop | $23 | $277 |
| Computer Programming | $14 | $167 |
| Computer Repair | $12 | $143 |
| Construction | $89 | $1,071 |
| Consulting | $15 | $179 |
| Contractor | $82 | $981 |
| Courier | $112 | $1,339 |
| DJ | $7 | $83 |
| Daycare | $7 | $79 |
| Dental | $6 | $66 |
| Dog Grooming | $32 | $384 |
| Drone | $13 | $159 |
| Ecommerce | $11 | $129 |
| Electrical | $28 | $340 |
| Engineering | $19 | $226 |
| Excavation | $53 | $634 |
| Florist | $30 | $362 |
| Food | $21 | $250 |
| Food Truck | $23 | $270 |
| Funeral Home | $13 | $159 |
| Gardening | $23 | $277 |
| HVAC | $31 | $373 |
| Handyman | $46 | $555 |
| Home-based | $5 | $59 |
| Hospitality | $34 | $412 |
| Janitorial | $24 | $288 |
| Jewelry | $15 | $178 |
| Junk Removal | $69 | $832 |
| Lawn/Landscaping | $19 | $223 |
| Lawyers | $26 | $312 |
| Manufacturing | $29 | $349 |
| Marine | $74 | $892 |
| Massage | $7 | $86 |
| Mortgage Broker | $7 | $82 |
| Moving | $129 | $1,546 |
| Nonprofit | $16 | $188 |
| Painting | $69 | $829 |
| Party Rental | $18 | $218 |
| Personal Training | $12 | $149 |
| Pest Control | $35 | $416 |
| Pet | $15 | $182 |
| Pharmacy | $3 | $38 |
| Photography | $8 | $101 |
| Physical Therapy | $3 | $41 |
| Plumbing | $32 | $380 |
| Pressure Washing | $41 | $495 |
| Real Estate | $15 | $177 |
| Restaurant | $31 | $374 |
| Retail | $17 | $207 |
| Roofing | $412 | $4,948 |
| Security | $26 | $309 |
| Snack Bars | $21 | $258 |
| Software | $13 | $157 |
| Spa/Wellness | $9 | $103 |
| Speech Therapist | $3 | $36 |
| Startup | $6 | $77 |
| Tech/IT | $13 | $162 |
| Transportation | $113 | $1,359 |
| Travel | $3 | $42 |
| Tree Service | $109 | $1,309 |
| Trucking | $133 | $1,597 |
| Tutoring | $5 | $59 |
| Veterinary | $10 | $116 |
| Wedding Planning | $14 | $168 |
| Welding | $58 | $693 |
| Wholesale | $20 | $238 |
| Window Cleaning | $103 | $1,237 |
How Did We Determine These Rates?
These rates are for small businesses with two employees across 79 major industries or business types and focus solely on workers' comp insurance policies.
Your location makes a bigger difference than you might expect. Workers' comp costs vary by state, ranging from $31 monthly in Maine to $42 in Louisiana. That's a $132 annual difference. MoneyGeek analyzed data from 46 states.
| Alabama | $36 | $428 |
| Alaska | $33 | $399 |
| Arizona | $35 | $414 |
| Arkansas | $35 | $417 |
| California | $40 | $485 |
| Colorado | $36 | $432 |
| Connecticut | $39 | $473 |
| Delaware | $39 | $469 |
| Florida | $39 | $471 |
| Georgia | $37 | $442 |
| Hawaii | $38 | $459 |
| Idaho | $34 | $413 |
| Illinois | $40 | $478 |
| Indiana | $35 | $424 |
| Iowa | $35 | $414 |
| Kansas | $35 | $423 |
| Kentucky | $34 | $406 |
| Louisiana | $42 | $504 |
| Maine | $31 | $377 |
| Maryland | $35 | $415 |
| Massachusetts | $38 | $457 |
| Michigan | $34 | $412 |
| Minnesota | $34 | $408 |
| Mississippi | $36 | $437 |
| Missouri | $36 | $431 |
| Montana | $36 | $433 |
| Nebraska | $34 | $412 |
| Nevada | $41 | $496 |
| New Hampshire | $36 | $433 |
| New Jersey | $41 | $493 |
| New Mexico | $36 | $438 |
| New York | $42 | $506 |
| North Carolina | $31 | $377 |
| Oklahoma | $34 | $411 |
| Oregon | $34 | $404 |
| Pennsylvania | $42 | $502 |
| Rhode Island | $40 | $478 |
| South Carolina | $37 | $448 |
| South Dakota | $34 | $407 |
| Tennessee | $35 | $424 |
| Texas | $37 | $439 |
| Utah | $35 | $416 |
| Vermont | $35 | $418 |
| Virginia | $33 | $396 |
| West Virginia | $38 | $457 |
| Wisconsin | $36 | $427 |
How Did We Determine These Rates?
These rates are for small businesses with two employees across 79 major industries or business types and focus solely on workers' comp insurance policies.
Six key factors impact the cost of workers' compensation insurance. Knowing them can help you understand your premium.
Your business type affects your base rate. A software company and a construction firm with identical payrolls can have annual premiums that differ by thousands of dollars. Misclassifying even one employee in a higher-risk category affects your entire rate calculation.
Your Experience Modification Rating (EMR) tracks your safety performance against similar businesses. Companies with clean records get rate reductions, while those with frequent claims face surcharges that compound yearly until their safety record improves.
Your total covered wages directly influence premium size. It includes all compensation: salaries, overtime, bonuses and some benefits that count as taxable wages. Double your payroll, double your premium base.
State laws and medical costs create substantial rate variations. Manufacturing businesses often relocate to states with lower workers' comp costs, saving thousands annually on the same operations and workforce.
As a small business owner, you'll likely pay minimum annual premiums regardless of your actual risk calculation. That means a one-person consulting firm might pay the same base premium as a nine-employee business in the same industry classification.
Insurance companies calculate your workers' compensation insurance cost using this formula:
Annual Premium = (Annual Payroll ÷ 100) × Classification Rate × Experience Modifier
For instance, a small plumbing business with a $150,000 payroll, classification rate of 5.40 and standard EMR of 1.0 would pay $8,100 annually.
Calculation: ($150,000 ÷ 100) × 5.40 × 1.0 = $8,100
Lowering your workers' comp costs involves more than shopping for different quotes. These proven strategies help you secure affordable workers' comp insurance while maintaining proper financial protection.
Some states don't require workers' comp for small businesses or sole proprietors, though self-employed people may still want coverage for personal protection. Others only mandate coverage once you reach a certain number of employees. Check your state's rules first because you might not even need coverage.
Ensure your employees are classified correctly. A tech company with one part-time maintenance worker shouldn't have all employees coded as maintenance staff, which can double or triple its base rate.
Rates vary widely between insurers. For example, the same restaurant might receive quotes from various carriers ranging between $2,400 and $3,200 for identical coverage. Contractors face similar rate variations due to their high-risk classification. Three quotes give you a good range to compare.
Most insurers reward customers who bring them more business. Combining workers' comp with general liability or commercial property insurance often earns you multi-policy discounts.
Instead of paying considerable upfront premiums, these plans let you pay based on actual payroll each pay period. They're perfect for businesses with seasonal fluctuations or tight cash flow.
Formal safety training reduces accidents and demonstrates your commitment to prevention. Insurers appreciate documented safety efforts and may offer premium reductions.
Report incidents quickly and help injured employees return to work safely. Poor claims handling can hurt your rates for years, while proactive management keeps costs manageable.
On average, workers' comp insurance costs range from $3 to $412 monthly, depending on your industry and state. Insurers calculate your premium using your business classification, claims history, payroll and location, which creates these wide variations. Secure more affordable workers' comp insurance by paying annually, bundling policies, comparing quotes and verifying your classifications.
MoneyGeek answers frequently asked questions about workers' compensation insurance:
Workers' comp insurance costs small businesses an average of $36 per month or $436 annually, according to MoneyGeek's analysis of quotes from 10 carriers. That's about $1 daily for financial protection when workplace injuries happen. Your actual cost depends on your industry, payroll size and claims history.
Workers' comp rates vary because injury risk differs between industries. MoneyGeek's analysis of 79 industries shows premiums ranging from $3 monthly for speech therapists to $412 for roofing contractors. Insurance companies set rates based on historical injury data. Office workers rarely get hurt, while roofers face constant fall risks and equipment hazards.
State requirements vary for small businesses. Some states don't require workers' comp for sole proprietors. Others mandate coverage once you reach a certain number of employees. Check your state's rules first because you might not need coverage, saving you the entire $36 monthly average premium.
Insurance companies calculate premiums using this formula: (Annual Payroll ÷ 100) × Classification Rate × Experience Modifier. Your classification rate depends on injury risk in your industry, while your EMR reflects your claims history.
Start by checking if your state requires coverage. Verify that your employee classification codes are correct and compare multiple quotes before getting workers’ compensation insurance. Consider paying annually and bundling your workers’ comp insurance policy with other types of business insurance for multi-policy discounts.
Workers' comp costs vary by state. MoneyGeek's analysis of 46 states shows premiums ranging from $31 monthly in Maine to $42 in Louisiana. That's an annual difference of $132. State laws, medical costs and regulatory requirements create these variations.
Your industry makes the biggest difference in what you'll pay. Take a software company and a construction firm with the same payroll — the construction business could pay thousands more each year. Your safety record comes next. Companies without claims often get discounts, but multiple claims can drive up your rates for years. Your total payroll directly affects your premium since insurers base costs on how much you pay employees.
You can usually deduct workers' comp premiums as a business expense. The IRS treats this coverage like other necessary business costs since most states require it. At an average cost of $436 per year, the tax break helps offset the expense. Check with your accountant to see how this applies to your tax situation.
You can, but state rules differ widely. Some states require coverage as soon as you hire your first worker. Others don't require it until you have five employees. Check what your state requires before you buy.
Workers' comp helps when your employees get hurt on the job. It covers their medical bills, doctor visits and rehab costs. Your injured workers also get partial pay while they can't work. Plus, if someone blames you for a workplace injury, the policy handles legal expenses too.
We researched what small businesses pay for workers' comp insurance across different industries and states.
To make fair comparisons, we used the same business profile for every quote:
This profile represents small businesses requiring workers' comp insurance in most states. We chose companies offering broad national coverage and online quote capabilities.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.
