Insurance cost
How much does workers’ comp cost for a first employee?
Short answer: there is no official nationwide workers’ comp rate this site can quote for a first employee. Premiums are usually a class rate per $100 of payroll, subject to a minimum premium, and they vary by state, classification, and carrier. This page explains that math and shows two verified Indiana advisory examples from the ICRB / NCCI advisory rates effective January 1, 2026. For the separate question of whether coverage is required, see do I need workers’ comp for my first employee.
Key takeaways
- The usual formula is payroll ÷ 100 × the class rate, then compare that computed premium with the minimum premium on the filing or quote. You pay the greater of the two, plus any carrier or state assessments your quote lists.
- This site does not invent a national average rate. It only prefills verified Indiana ICRB advisory rates when you select Indiana in the calculator.
- In official Indiana examples already used on this site, a first plumbing hire can hit the class 5183 minimum premium of $451, while a full-time landscaping hire at the class 0042 advisory rate computes to $886.75, which is above that class’s $821 minimum. Those figures are advisory, not a binder.
On this page
Add a quote to the true cost Enter the rate from your quote, per $100 of payroll. Indiana advisory rates fill in only if you choose Indiana.
Open the calculatorHow a first-employee premium is built
Workers’ compensation is insurance, not a payroll tax. A rating bureau or state fund publishes advisory or administered class rates. Your carrier assigns a classification that describes the work (for example, plumbing or landscape gardening), multiplies the rate by payroll, and often applies a minimum premium so a small policy still covers the cost of issuing it. Experience mods usually do not help or hurt a brand-new employer the way they do an older firm, but the quote is still not a national flat fee.
That is why two shops paying the same wage can see very different premiums: a roofer and an office-based estimator are not in the same class, and a state with a state fund is not priced like a competitive-market state. Ask an agent for a quote in the state where the work is done, with the class code written on the quote.
Verified Indiana advisory examples
These figures come from the official ICRB filing effective January 1, 2026 and from the worked examples on this site. They are shown so you can see the formula, not so you can copy them into another state.
| Indiana example (advisory, not a binder) | Class 5183 plumbing | Class 0042 landscaping |
|---|---|---|
| Advisory rate per $100 of payroll | $0.924 | $2.097 |
| Minimum premium on the filing | $451 | $821 |
| Payroll used in the site example | $43,721.60 (BLS-based helper wage) | $42,286.40 (BLS landscaping mean) |
| Computed premium (payroll ÷ 100 × rate) | $403.99 | $886.75 |
| Premium used in the example | $451.00 (minimum applies) | $886.75 (rate applies) |
The plumbing numbers are walked through on the cost to hire a plumber’s helper in Indiana. The landscaping numbers are on the cost to hire a first landscaping employee in Indiana. Class descriptions are discussed on what class 5183 means and the Indiana one-employee workers’ comp guide.
What to ask for in a quote
- The class code and wording the agent is using.
- The rate per $100 of payroll and the minimum premium.
- Whether the quote is estimated annual premium, a deposit, or an audit-adjustable amount.
- Any state assigned-risk or residual-market surcharge, if that is how coverage is obtained.
- When coverage starts, because many states expect it to be in force on the first day of work.
Part-time hours lower the computed premium, but they may not lower a minimum premium. If you are comparing a 20-hour hire with a 40-hour hire, run both payrolls through the same rate and then apply the minimum. The calculator will use a verified Indiana minimum when Indiana and the minimum-premium option are selected; in every other state, type the rate from your quote.
For the rest of the first-hire stack — wages and payroll taxes — see the cost of hiring your first employee.
Frequently asked questions
How is workers' comp priced for one employee?
Usually as a class rate per $100 of payroll, subject to a minimum premium. The computed premium is payroll divided by 100, multiplied by the class rate. If that amount is below the minimum, the minimum applies. Rates vary by state, class, and carrier.
Why doesn't this site show a national workers' comp rate?
There is no single official national rate. Publishing a made-up average would be misleading. The site only prefills verified Indiana ICRB advisory rates when you select Indiana, and it asks you to enter a quote everywhere else.
Do part-time hours reduce the premium?
They reduce the computed premium because payroll is lower, but a minimum premium may still apply. Compare both schedules on the same class rate before you assume a part-time hire is proportionally cheaper.
Figures on this page were checked against the linked official IRS, DOL, USCIS, ACF, and (where used) Indiana ICRB pages in November 2026. Examples are planning estimates, not a tax, legal, or insurance outcome. Confirm with your agencies, accountant, and carrier before you hire or classify a worker.