The Workers' Comp Premium Formula
Workers' compensation premium is calculated using a straightforward formula that applies whether you have a traditional policy or PEO coverage:
(Total Payroll ÷ 100) × Class Code Rate = Base Premium
Then add: State surcharges (3–6%) + PEO admin fee (2–5% of payroll)
For example, a roofing company with $500,000 in annual payroll at the 2026 FWCJUA rate of $6.752/$100 payroll would have a base premium of $33,760 per year, or approximately $2,813 per month.
2026 Rate Examples by Industry (Florida)
Based on official 2026 FWCJUA rates. Assumes 10 employees at average payroll for the industry. Actual rates vary by experience modification and surcharges.
| Industry | Code | Rate/$100 | Annual Payroll | Est. Annual Premium |
|---|---|---|---|---|
| Roofing | 5551 | $6.75 | $500,000 | $33,750 |
| General Construction | 5645 | $7.69 | $500,000 | $38,450 |
| Concrete Work | 5213 | $5.18 | $500,000 | $25,900 |
| Electrical | 5190 | $2.97 | $500,000 | $14,850 |
| HVAC | 5537 | $3.00 | $500,000 | $15,000 |
| Towing | 7219 | $5.01 | $300,000 | $15,030 |
| Trucking (Local) | 7380 | $4.49 | $400,000 | $17,960 |
| Home Health | 8835 | $1.38 | $600,000 | $8,280 |
5 Factors That Determine Your PEO Workers' Comp Cost
Class Code (Industry)
The single biggest driver of your rate. Roofing (5551) at $6.75/$100 payroll costs 4.9x more than home health (8835) at $1.38/$100. Your class code is determined by the type of work your employees actually perform.
Total Payroll
Workers' comp premium is calculated as a percentage of payroll. Higher payroll = higher premium. The formula is: (Payroll ÷ 100) × Rate = Annual Premium.
Experience Modification Factor (EMod)
Your EMod reflects your claims history relative to other businesses in your industry. An EMod of 1.0 is average. Above 1.0 means you pay more; below 1.0 means you pay less. New businesses start at 1.0.
PEO Admin Fee
In addition to the base workers' comp rate, PEOs charge an administrative fee — typically 2–5% of payroll — that covers payroll processing, HR support, and compliance services.
State Surcharges & Assessments
Florida adds several state-mandated surcharges to workers' comp premiums, including the Special Disability Trust Fund (SDTF) assessment and the Florida Guaranty Association assessment. These typically add 3–6% to the base premium.
PEO vs. Florida Assigned Risk Plan (FWCJUA): Cost Comparison
If you've been declined by standard carriers, your alternative to a PEO is the Florida Workers' Compensation Joint Underwriting Association (FWCJUA) — the state's assigned risk plan. The FWCJUA adds a 30–50% surcharge on top of the base rate to compensate for the higher-risk pool.
| Scenario | PEO (Comp Ninjas) | FWCJUA Assigned Risk |
|---|---|---|
| Roofing, $500K payroll | $33,760 + admin fee | $43,888–$50,640 + surcharges |
| Construction, $300K payroll | $23,070 + admin fee | $29,991–$34,605 + surcharges |
| Towing, $200K payroll | $10,020 + admin fee | $13,026–$15,030 + surcharges |
| Annual audit | None — pay-as-you-go | Required — can result in large bills |
| COI issuance | Same business day | 5–15 business days |
Frequently Asked Questions
How is PEO workers' comp premium calculated?
The base formula is: (Total Payroll ÷ 100) × Class Code Rate = Base Premium. To this base premium, the PEO adds state surcharges (typically 3–6%), the PEO admin fee (typically 2–5% of payroll), and any applicable experience modification. For example, a roofing company with $500,000 in payroll at the 2026 FWCJUA rate of $6.75/$100 would have a base premium of $33,750 before surcharges and admin fees.
Is PEO workers' comp cheaper than a traditional policy?
For hard-to-place industries, yes — often significantly. If you've been declined by standard carriers and are facing the Florida assigned risk plan (FWCJUA), PEO rates are typically 30–50% lower because the PEO's group policy avoids the FWCJUA surcharge. For standard industries with good loss history, PEO rates are generally comparable to voluntary market rates, with the added benefit of no annual audit.
What is the minimum cost to get workers' comp through a PEO?
There is no minimum premium requirement for PEO workers' comp. You pay based on actual payroll each period. A sole proprietor with one employee paying $40,000/year in wages might pay as little as $550–$3,000 annually depending on their industry. Compare this to traditional policies which often have minimum premiums of $1,500–$5,000.
Are there any upfront costs or deposits with PEO workers' comp?
Comp Ninjas charges a one-time setup fee of $875. There is no large premium deposit required. Traditional workers' comp policies typically require a deposit equal to 25–33% of the estimated annual premium — which can be $8,000–$15,000 or more for construction companies.
How does pay-as-you-go billing work?
With pay-as-you-go PEO workers' comp, your premium is calculated each payroll period based on actual wages paid. If you have a slow week with fewer workers, you pay less. If you have a busy week with overtime, you pay slightly more. There are no large deposits and no annual audit adjustments — you always pay exactly what you owe.
What are the 2026 FWCJUA rates for construction in Florida?
Key 2026 FWCJUA rates for Florida construction include: Roofing (5551) $6.752/$100 payroll, Carpentry/Framing (5645) $7.689/$100, Concrete (5213) $5.184/$100, Masonry (5022) $5.220/$100, Electrical (5190) $2.969/$100, HVAC (5537) $2.995/$100, Painting (5474) $4.481/$100. These are base rates before experience modification and surcharges.