Workers’ Comp Pay-As-You-Go
One of the costs of doing business is maintaining a workers’ compensation insurance policy. Workers’ comp premiums are determined by the classification of the employees (what kind of work they perform) and a set $ amount per $100 of payroll. Workers’ comp pay-as-you-go spreads premium installments across the entire year by tying directly to the total wages of each payroll. The premium payment is made every payroll cycle, all but eliminating over or underpayment. Consistent payments also take away the impact that large premium payments may have on cash flow.
Benefits of Workers’ Comp Pay-As-You-Go
- Improve cash flow through per-pay-period premium installments
- Eliminate the guesswork, pay for actual wages paid
- Minimize year-end adjustments and surprises
Typically, insurance agencies collect workers’ comp premiums in two or three annual installments, based on estimated employee wages. This approach requires a few larger payments and often results in over or underpayment at the end of the year. Remember, the payments are based on estimates. Pay-as-you-go helps eliminate these challenges.
What’s more, insurance agencies are glad to accept pay-as-you-go premium installments. It’s a win-win all around.
Understanding Workers’ Comp – The Employer’s Responsibility
To fully understand your liability as an employer, including private employers and government bodies (State, county, city, and towns), the liability of landowners (who contracts to have wood harvested from the landowner’s property by a contractor), nonresident employers, and complete access to the Maine statutes, please review the Workers’ Compensation Act of 1992 at maine.gov. Your insurance agent may also be looked to as a resource.
Ready to take the guesswork out of your workers' comp payments?
Contact us today for a free consultation to discuss workers’ comp pay-as-you-go.