Insurance
Pay-as-you-go workers’ comp, and what it does not change
Key takeaways
- Pay-as-you-go (sometimes called payroll-billed) workers’ compensation is a billing method. It does not, by itself, lower the premium or change the class code.
- Premium still follows actual payroll, classification, and the other factors on the policy, and an audit can still true-up the year.
- Official first-hire examples on this site (Indiana ICRB and Wisconsin WCRB) are estimates, not quotes and not a payment schedule.
- In Ohio and North Dakota, private workers’ compensation policies generally are not sold. Use the official state fund, not a private-policy or payroll-enrolled private policy CTA.
On this page
A first hire can make a workers’ compensation bill feel lumpy: some policies collect a deposit against an estimated annual premium, then adjust after a payroll audit. Pay-as-you-go programs instead bill premium from actual wages as they are paid, often alongside payroll. The coverage is still workers’ compensation. The change is when you pay, not a promise that the year will cost less.
What pay-as-you-go is
In a typical estimated-premium policy, the carrier (or fund) starts from expected payroll in each class, applies the rate and other factors, and may require a deposit or installment plan. After the policy period, an audit compares estimated payroll with actual payroll and issues a refund or an additional bill.
In a pay-as-you-go arrangement, reported wages — often from the same payroll file you already run — are used to bill premium more frequently. That can reduce the size of a year-end surprise when actual hours tracked closely, but it does not remove the audit, the class code, the minimum premium, or the experience modification, where those apply. This page does not invent a standard deposit percentage or a nationwide monthly factor, because those are policy terms, not a public rate table.
A first-hire cash-flow illustration, not a bill
Two official bureau examples already on this site show the annual premium being estimated, not billed:
- Indiana ICRB advisory rate for plumbing class 5183, effective January 1, 2026: on a $41,600 payroll example the calculated premium is $384.38, then the published $451 minimum applies. See the plumber cost page and the ICRB January 1, 2026 rate filing (PDF).
- Wisconsin WCRB manual rate for class 5183, effective October 1, 2026: $2.212 per $100 of payroll and a $618 minimum, retrieved from the WCRB Class Code Lookup for 5183 on November 13, 2026. The same $41,600 payroll example estimates $920.19, which is above that minimum.
If that Wisconsin estimate were spread evenly over 12 months only to show timing, $920.19 ÷ 12 is $76.68 per month. That arithmetic is an illustration of cash-flow timing. It is not a payment schedule, a down payment, a discount, or a quote. A real pay-as-you-go bill follows actual wages and the program’s own rules.
Ohio and North Dakota are not private-policy states
Pay-as-you-go billing from a private carrier is the wrong next step in a monopolistic fund state. In Ohio, coverage is obtained from the Ohio Bureau of Workers’ Compensation (or approved self-insurance where allowed). In North Dakota, Workforce Safety & Insurance is the sole provider. Washington and Wyoming also use official state funds; Washington prices coverage per worker hour, not per $100 of payroll. See the four state-fund guide. The Gusto link on this page is a payroll option for shops that can use it. It is not a workers’ compensation policy, and it is not the path for Ohio or North Dakota coverage.
What we are not claiming
We do not recommend a specific insurer. We do not quote, bind, or sell insurance. Pay-as-you-go is not “cheaper workers’ comp,” a coupon, or a guaranteed savings program. Gusto is a payroll service; if a payroll provider also helps you enroll coverage through a partner, that partner — not this website — underwrites or declines the policy. Confirm program rules, including which states are supported, with the provider and with the official agency in your state.
Frequently asked questions
Is pay-as-you-go workers' comp cheaper?
Not automatically. It is a billing method. The premium still follows payroll, classification, minimum premium, and other policy factors. An audit can still adjust the year. This page does not promise savings.
Can I use a private pay-as-you-go policy in Ohio or North Dakota?
Generally no. Those states use official state funds (Ohio BWC and North Dakota WSI). Start there, not with a private workers' compensation policy or a payroll CTA that enrolls a private policy.
Does a payroll service underwrite the policy?
Gusto is a payroll service, not the insurer. This site does not quote or bind coverage and does not recommend a specific insurer.
This page summarizes official agency pages retrieved or reviewed on November 13, 2026. It is not legal, tax, or insurance advice, not a quote, and not a recommendation of a specific insurer. Confirm current rules with the linked agency, and with counsel or a licensed agent when you need a determination on your facts.
If you need payroll set up for a first W-2 hire, you can Run payroll with Gusto. Gusto is a payroll service, not the insurer, and this is not a guarantee of a policy, a rate, or savings. In Ohio and North Dakota, do not use a private workers’ compensation policy — start with the official state fund (Ohio BWC or North Dakota WSI). Washington and Wyoming also use official state funds; see the state-fund guide.
Partner link. If you buy or sign up through this link, FirstHire may earn a commission at no extra cost to you. This is not an endorsement, not a quote, and not a guarantee of approval, coverage, or savings. Full disclosure.
When you want a private-market workers’ compensation quote in a state where private policies are sold, you can start with this partner form. We do not recommend a specific insurer, and we do not quote or bind coverage. This option is not a path in Ohio or North Dakota.
Compare a workers’ compensation quote
Partner link. If you request a quote through this link, FirstHire may earn a commission at no extra cost to you. This is not an endorsement or a guarantee of approval, coverage, or savings. Full disclosure.
To get a quote in a private-market state, talk to a licensed agent or a carrier authorized where the work is done. In Ohio, North Dakota, Washington, or Wyoming, start with the official state fund instead of a private policy.