Average Workers' Comp Insurance Cost (2026 Report)

Average workers' comp insurance costs range from $16 to $343 per employee monthly. Rates primarily vary by industry, business size and location.

This report shows benchmark costs across industries and competitive states, explains what drives price differences and helps you compare quotes using the same business details.

Written by Angelique Palenzuela-Cruz

Updated: March 16, 2026

Advertising & Editorial Disclosure

How Much Does Workers' Comp Insurance Cost?

Workers' comp insurance costs an average of $113 per employee monthly ($1,354 per employee annually) for businesses with one to four employees across 408 industries and 46 states plus Washington, D.C.

This is a benchmark, not a quote. Insurers adjust workers' comp rates and all small business insurance costs based on industry risk (how often and how severely injuries occur), business size (total payroll) and location (state-specific regulations).

You can also use our workers' comp insurance calculator to get a more accurate estimate you can use below.

MoneyGeek analyzed quote data from major U.S. small business insurance providers and modeled standardized premium estimates across common business profiles. These modeled results provide a consistent national benchmark and compare premiums by business size, industry and location.

Dataset Scope and Assumptions

Our cost modeling uses standardized inputs for consistent comparisons.

Providers analyzed: 10 major insurance providers
Industries covered: 408 industries, each assigned its most common workers' comp classification code for representative pricing
Geography: 46 competitive states plus Washington, D.C. (excludes monopolistic states: North Dakota, Ohio, Washington and Wyoming)
Employee count bands: zero, one to four, five to nine, 10 to 19 and 20 to 49 employees (representing ~95% of small businesses)
Policy baseline: standard workers' compensation policy with state-mandated benefit levels
Total estimates modeled: just over 1 million standardized pricing estimates

We incorporated modeled average payroll across all combinations of states, industry and employee counts to improve per-employee pricing accuracy. We used data from these sources for our cost factors:

CBP (for employee size class density by state + NAICS)
QCEW (for wage/payroll intensity by industry + geography)
Economic Census / SUSB (for receipts/output intensity by industry)
Calibrated against:
- Private comp databases
- NCCI class code rate filings
- State rating bureau data

How We Calculated Average Workers' Comp Costs

Our published averages represent modeled premiums for standardized business profiles, aggregated in two ways:

National benchmark average – The national average cost reflects the modeled premium for a standardized one to four-employee small business across all industries and states in our dataset, calculated per employee.
Segment averages – We calculated average modeled premiums for our national base profile, isolating these variables:
- Employee count (business size ranges)
- General industry categories (each assigned the most common workers' comp classification code for that industry)
- States (46 competitive states plus Washington, D.C.)

Segment averages were produced by aggregating modeled pricing trends across the full dataset so readers can compare how premiums shift across business types and regions on a per-employee basis.

Worker's Comp Insurance Cost Estimate Calculator

Select your general industry area, state and employee count to get average per employee workers' comp insurance rate estimates for your business. Rates are for state mandated workers' compensation coverage for the most common work classification codes for each industry area.

If you are a sole proprietor looking for an estimate, select 1 to 4 employees for the most accurate price.

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Average monthly per employee rate—

What Factors Affect Workers' Comp Insurance Costs?

Three baseline factors drive workers' comp pricing: industry classification, geographical location and business size. Insurers use these to estimate how often workplace injuries occur and how costly they are. Business size reflects payroll exposure, location captures state benefit mandates and medical costs, and industry signals the physical risk of the work.

We used the same approach in our cost modeling to estimate rates. Each driver creates measurable cost differences.

Industry classification

Industry classification is the largest baseline pricing driver for workers' comp coverage because it reflects injury risk. Insurers assess how physical the work is, what equipment or hazards are involved, and how frequently and severely injuries occur in each job type. A desk-based role carries lower claim costs than work involving heavy machinery, heights or repetitive physical strain.

In our analysis of 408 industries, workers' comp premiums range from 86% lower than average for Beauty, Body and Wellness Services to 204% higher than average for Transportation and Logistics.

Geographic location

Each state sets its own benefit levels, medical fee schedules and regulatory requirements for workers' comp coverage. Geographic location is the second strongest driver for workers' comp premiums. States with higher medical costs, more generous wage replacement formulas or longer claim duration patterns produce higher premiums. Legal environments that favor broader coverage interpretations or larger settlements also push costs upward.

Premiums across 46 competitive states, plus Washington, D.C., range from 44% below average in Indiana to 138% above average in New York.

Business size

Business size is the third baseline driver and affects workers' comp pricing differently than other coverage types. While total premiums rise with more employees, per-employee costs usually decline because larger businesses qualify for experience rating, gain administrative cost advantages and maintain stronger safety programs that reduce claim frequency.

Ninety-five percent of small businesses have 49 or fewer employees. Per-employee costs range from the baseline rate for one to four employees to 21% lower for businesses with 20 to 49 employees.

Average Workers' Comp Insurance Costs by Industry

Industry classification creates the widest cost variation in workers' comp pricing because it captures the physical risk in different types of work. At the extremes are Beauty Services and Financial Services at $16 monthly per employee and Transportation and Logistics at $343 monthly per employee. Insurers assess injury frequency and severity based on job tasks, equipment and hazards.

Low-cost industries (20%+ below national average): 17 of 25 industries (68%)
Mid-cost industries (within ±20% of national average): 3 of 25 industries (12%)
High-cost industries (20%+ above national average): 5 of 25 industries (20%)

Nearly three-quarters of industries price below the national average. Desk-based roles like Financial Services and Consulting cluster 75% to 85% below average due to minimal injury risk. On the other end of the risk spectrum, transportation and contracting/construction related industries sit over 180% or higher on average per employee compared to national benchmarks

Data filtered by:


Agriculture & Natural Resources	$180	$2,162	-60%
Arts, Media & Entertainment	$102	$1,225	10%
Beauty, Body & Wellness Services	$16	$196	86%
Childcare Services	$41	$492	64%
Cleaning Services	$135	$1,619	-20%
Construction & Contracting	$319	$3,822	-182%
Consulting Services	$23	$278	79%
Education	$73	$880	35%
Financial Services	$16	$197	85%
Fitness Services	$74	$892	34%
Food & Beverage	$46	$550	59%
Healthcare & Medical	$56	$678	50%
Hospitality, Travel & Tourism	$48	$578	57%
Manufacturing	$160	$1,926	-42%
Marketing & Communications	$17	$209	85%
Nonprofit & Associations	$66	$795	41%
Other Professional Services	$25	$304	78%
Pet Care Services	$73	$872	36%
Real Estate & Property Services	$24	$292	78%
Recreation & Sports	$125	$1,497	-11%
Repair & Maintenance	$83	$998	26%
Retail & Product Rental	$61	$726	46%
Tech/IT	$47	$562	58%
Transportation & Logistics	$343	$4,110	-204%
Wholesale & Distribution	$204	$2,449	-81%

Use these resources to explore costs for your industry.

Contracting and Construction Workers' Comp Insurance Cost

Consulting Workers' Comp Insurance Cost

Food and Beverage Workers' Comp Insurance Cost

Tech and IT Workers' Comp Insurance Cost

Average Workers' Comp Insurance Costs by State

Each state's unique workers' comp system creates different cost structures for employers. Estimates range from $63 monthly per employee (Indiana) to $269 monthly per employee (New York), and more than two-thirds of states price below the national average.

Low-cost states (20%+ below national average): 17 of 47 states (36%)
Mid-cost states (within ±20% of national average): 21 of 47 states (45%)
High-cost states (20%+ above national average): 9 of 47 states (19%)

Nine states exceed the national average by 20% or more; seven of those cluster in the Northeast or West Coast, where mandated benefits and medical costs run higher. The other 81% of states fall within 20% of or below the national average.

Data filtered by:


Alabama	$74	$882	35%	9
Alaska	$181	$2,170	-60%	41
Arizona	$90	$1,079	20%	17
Arkansas	$65	$777	43%	2
California	$256	$3,069	-127%	46
Colorado	$113	$1,350	0%	32
Connecticut	$202	$2,420	-79%	44
Delaware	$128	$1,537	-14%	37
District of Columbia	$234	$2,804	-107%	45
Florida	$103	$1,237	9%	27
Georgia	$99	$1,193	12%	25
Hawaii	$138	$1,654	-22%	39
Idaho	$71	$846	37%	5
Illinois	$143	$1,720	-27%	40
Indiana	$63	$760	44%	1
Iowa	$68	$818	40%	4
Kansas	$74	$887	34%	10
Kentucky	$79	$944	30%	12
Louisiana	$106	$1,268	6%	29
Maine	$99	$1,192	12%	24
Maryland	$119	$1,433	-6%	35
Massachusetts	$184	$2,211	-63%	42
Michigan	$115	$1,378	-2%	33
Minnesota	$112	$1,338	1%	31
Mississippi	$71	$856	37%	6
Missouri	$91	$1,088	20%	18
Montana	$95	$1,136	16%	20
Nebraska	$73	$881	35%	8
Nevada	$97	$1,169	14%	22
New Hampshire	$116	$1,390	-3%	34
New Jersey	$191	$2,294	-69%	43
New Mexico	$83	$993	27%	14
New York	$269	$3,226	-138%	47
North Carolina	$88	$1,061	22%	16
Oklahoma	$94	$1,129	17%	19
Oregon	$104	$1,247	8%	28
Pennsylvania	$133	$1,595	-18%	38
Rhode Island	$121	$1,449	-7%	36
South Carolina	$102	$1,224	10%	26
South Dakota	$65	$780	42%	3
Tennessee	$81	$969	28%	13
Texas	$76	$914	33%	11
Utah	$73	$876	35%	7
Vermont	$107	$1,278	6%	30
Virginia	$85	$1,015	25%	15
West Virginia	$98	$1,179	13%	23
Wisconsin	$95	$1,145	15%	21

Average Workers' Comp Insurance Costs by Business Size

Per-employee workers' comp costs fall as headcount grows, from $113 monthly for businesses with one to four employees to $89 for those with 20 to 49. The steepest drop hits at the five-employee threshold, where per-employee costs fall 10%.

This progressive discount occurs for two main reasons. Insurers offer volume discounts to retain larger clients, and growing companies typically develop better safety practices through increased industry experience, lowering claims risk.

How to Lower Workers' Comp Insurance Costs Without Sacrificing Coverage

Business size, industry classification and location set the baseline, but they don't lock in your final quote. Insurers adjust rates based on controllable factors like coverage design, risk management and underwriting information.

Methods that lower cost at quoting or renewal, plus operational changes that influence future pricing:

Quick Workers' Comp Cost Lowering Methods

Apply these methods at quoting or renewal to reduce per-employee costs:

Verify employee classification codes

Insurers price workers' comp using specific job classification codes that reflect injury risk. Misclassified employees (assigning office staff to a higher-risk code, for example) inflate premiums unnecessarily. Review your policy's class code assignments with your agent to ensure each employee is placed in the most accurate category for their actual duties.

Shop multiple carriers at renewal

Workers' comp pricing varies considerably between insurers for the same business profile. Carriers use different risk models and have different appetites for specific industries or claim histories. Request workers' comp insurance quotes from at least three insurers 60 to 90 days before renewal to compare rates using identical coverage specifications and payroll projections.

Confirm accurate payroll reporting

Premiums are calculated based on payroll figures, so overestimating projected annual payroll raises costs immediately. Provide precise payroll data by employee class code at quoting and participate in the end-of-policy audit to adjust premiums based on actual wages paid rather than estimates.

Ask about discounts

Many insurers offer immediate premium reductions for qualifying businesses. Common discounts include drug-free workplace programs, safety committee participation and experience modification credits for favorable claims history. Ask your agent which discounts you currently qualify for and what documentation is required.

Bundle workers' comp with other policies

Insurers often reduce rates when businesses purchase multiple coverage types from the same carrier. Bundling workers' comp with general liability or commercial property can trigger multi-policy discounts. Request combined quotes to compare bundled pricing against separate policies from different carriers.

Review and update your experience modification rate

Your experience mod reflects your claims history compared to similar businesses and directly multiplies your premium. If your mod is above 1.0, review the calculation for errors in claims data or misclassified incidents. Contact your state's rating bureau to dispute inaccuracies that may be inflating your mod.

Long-Term Workers' Comp Cost Lowering Methods

You can decrease claim costs and improve renewal pricing over time.

Workers' Comp Insurance Cost: Bottom Line

Workers' comp costs vary because insurers estimate claim frequency and severity based on your industry classification, business size and geographic location. The national average of $113 per employee monthly is a benchmark, not a quote for your situation.

This report shows where you fall, not your exact cost.

Three questions help you assess your position:

Where does your business fall relative to the benchmark? (Compare your industry, employee count and state to the distributions above.)
Which baseline factors drive the largest differences? (Industry classification creates the widest spread, followed by state and size.)
What can you control at quoting and renewal? (Classification accuracy, payroll reporting, discounts and claims management practices.)

These questions identify which combination of factors influences your pricing, not just where you stand against the average.

Workers' Comp Insurance Cost: Next Steps

Resources to identify low-cost providers and evaluate carrier options:

This report sets baseline expectations for your industry, size and state. Request quotes with identical business details so rate differences reflect actual pricing variation rather than input inconsistencies.

Get Personalized Workers' Comp Insurance Quotes

Select your industry and state to get a customized workers' comp quote.

Industry

State

If you want to learn more about worker’s comp insurance:

If you want to explore other types of business insurance:

About Angelique Palenzuela-Cruz

Angelique Palenzuela-Cruz is a Content Writer at MoneyGeek specializing in business insurance. She focuses on general liability, workers' compensation and professional liability coverage, helping small business owners cut through policy jargon and understand what they're actually buying.

Angelique has spent over five years reporting on personal finance, with deep experience in both insurance and lending markets. Her psychology background also gives her a unique understanding of how people actually process difficult financial decisions, allowing her to meet readers where they are, simplify complex concepts and build decision making frameworks that give them confidence. Whether you're learning about policies, comparing providers or trying to figure out requirements, Angelique does the legwork, digging into regulations, analyzing policy language and testing her explanations against agent-level standards so you get straight answers without fluff.

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