Workers' compensation calculations

Calculation details

Gross Wages - Excluded Wages - Excluded Overtime Premium = Subject Wages
Workers' Compensation Rate * Experience Rating = Adjusted Workers' Compensation Rate
Subject Wages * Adjusted Workers' Compensation Rate = Adjusted Premium Amount

$1500.00 - $500.00 - $250.00 = $750.00 Subject Wages
1.0% * 75.00% = 0.75% Workers' Compensation Adjusted Rate
$750.00 * 0.75% =
5.625 Adjusted Premium Amount

Gross Wages - Excluded Wages - Excluded Overtime Premium = Subject Wages
Subject Wages * Workers' Compensation Rate = Premium Amount
Premium Amount * Experience Rating = Adjusted Premium Amount

$1500.00 - $500.00 - $250.00 = $750.00 Subject Wages
$750.00 * 1.0% = $7.50 Premium Amount
$7.50 * 75.00% =
5.625 Adjusted Premium Amount

Definitions of terms

Gross wages.
The total wage amounts of all pay items on a payroll check (minus any items that are set up to be excluded from gross pay).
Excluded wages.
Any pay item that has been set up in the
Setup
then
Payroll Items
screen to be excluded from workers' compensation for a particular state or for all states.
Overtime premium.
The portion of premium pay (half time in most cases) for all overtime amounts. Most states exclude this, although a few don't (refer to the state-specific exceptions section).
Subject wages.
The base wage amount from which workers' compensation is calculated.
Premium amount.
The full premium amount due, before multiplying by the experience rating.
Experience rating.
A rating system used by employers that can either raise or lower the premium amount due based on the client's policy history and risk.
Adjusted premium amount.
The Premium amount after it has been adjusted by the experience rating.

State-specific calculation differences

Washington: Washington state uses hours worked to calculate the workers compensation premium amounts (also referred to as Washington L&I) instead of wage amounts. Washington SDI tax is calculated the same way, using the employer and employee rate entered in the
Worker’s Compensation
tab of the
Setup
then
Clients
screen and an active Worker's Compensation code in the
Workers' Compensation
tab of the
Setup
then
Employees
screen.
The following states exclude accruable benefits from their Workers' Compensation calculations:
Kansas
Oregon
South Dakota
Washington

Exclude payroll items from workers' compensation calculations

Select
Setup
then
Payroll Items
.
Select the client at the top of the screen then highlight the payroll item in the Payroll Items list.
Go to the
Main
tab and select
Edit
.
In the Exclusions section, select either
Exclude all
,
Selected
, or
No jurisdictions from workers' compensation calculations
for this payroll item.

Exclude accruable benefits from workers' compensation calculations

Select
Setup
then
Accruable Benefits
.
Select the client at the top of the screen then select
Edit
.
Select the accruable benefit in the Accruable Benefits list.
In the Exclusions section, choose whether to
Exclude all
,
Selected
, or
No jurisdictions from workers' compensation calculations
for this benefit.