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Workers Compensation - Pay as You Go


Robert Truska, CLCS, SBCS

Pay-as-you-go workers's compensation insruance is increasing in popularity in the business world. Eliminating up-front costs and outdated payment methods are two of the biggest reasons businesses are turning to pay-as-you-go for workers’ comp insurance. Compared to an estimated annual payroll amount, pay-as-you go relies on real-time payroll to calculate workers’ comp premiums, resulting in more accurate premium payments. This means less of a chance to pay too much throughout the year – or have a premium adjustment at the end of the policy term due to under-reported payroll.  

You can purchase a policy with little money down, and pay your premium in smaller amounts spread over the course of the year.

That can markedly improve your cash flow – especially when you compare it to traditional workers compensation premiums, which typically require you to put down a hefty 25% deposit (based on your estimated annual payroll) and make several monthly installments thereafter. This can put quite a squeeze on your operating cash. Since most employers earn revenue throughout the year, it may make sense to spread an insurance premium payment over the course of the year.

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