Cost of workers’ comp research summary: Serving as an essential safety net for workers all over the US, workers’ compensation insurance ensures an income when you’re injured. However, the average cost depends on several factors, including your state of residence and company.
So, if you’re an employer or job seeker who wants to know more about the average cost of workers’ comp, we’ve got you covered. We’ve investigated the average cost, and according to our research:
Key Takeaways:
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The average cost of workers’ compensation insurance is $936 per employee annually, or $78 per month.
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46% of workers’ comp costs exceed $150 per month.
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40% of small businesses pay between $30-$60 per month on workers’ compensation insurance.
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The construction and contracting industry has the highest average worker’s compensation costs, $254 per month.
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The finance and accounting industry has the lowest average worker’s compensation costs, only $33 per month.
Average workers’ compensation costs by state
Workers’ compensation costs vary by state, with some states having much higher costs than others. New Hampshire has the highest average cost in the US, at $106 per month. Other states among the top three most costly include Wisconsin ($85) and Kansas ($56).
The states with the most inexpensive workers’ comp are the ones where the average cost is only $16 per month. These states include:
To learn more about the average cost of workers’ comp by state, here are the average monthly costs:
Average cost Of workers’ compensation by state
| State | Average monthly premium |
|---|---|
| Alabama | $28 |
| Alaska | $28 |
| Arizona | $23 |
| Arkansas | $28 |
| California | $23 |
| Colorado | $26 |
| Connecticut | $21 |
| Delaware | $38 |
| Florida | $24 |
| Georgia | $17 |
| Hawaii | $35 |
| Idaho | $16 |
| Illinois | $50 |
| Indiana | $16 |
| Iowa | $34 |
| Kansas | $56 |
| Kentucky | $33 |
| Louisiana | $39 |
| Maine | $48 |
| Maryland | $35 |
| Massachusetts | $16 |
| Michigan | $19 |
| Minnesota | $16 |
| Mississippi | $16 |
| Missouri | $42 |
| Montana | $16 |
| Nebraska | $25 |
| Nevada | $23 |
| New Hampshire | $106 |
| New Jersey | $16 |
| New Mexico | $26 |
| New York | $16 |
| North Carolina | $22 |
| North Dakota | N/A |
| Ohio | N/A |
| Oklahoma | $26 |
| Oregon | $16 |
| Pennsylvania | $23 |
| Rhode Island | $16 |
| South Carolina | $42 |
| South Dakota | $42 |
| Tennessee | $33 |
| Texas | $16 |
| Utah | $16 |
| Vermont | $39 |
| Virginia | $24 |
| Washington | N/A |
| West Virginia | $39 |
| Wisconsin | $85 |
| Wyoming | N/A |
Average workers’ compensation costs by bracket
The share of companies paying certain workers’ compensation costs varies. To find out more about the share of companies paying different costs, here are two comprehensive charts:
Average monthly cost of workers’ compensation for SMBs
| Average monthly cost | Share of small businesses |
|---|---|
| Under $30 | 23% |
| $30-$60 | 40% |
| $60+ | 37% |
When it comes to small businesses, the most common workers’ comp cost is between $30-$60, but only just. 40% of small businesses pay that amount, compared to 37% paying over $60 per month.
The average monthly workers’ comp cost by bracket is much higher when measuring all companies. Consider this chart:
Average monthly cost of workers’ compensation by bracket
| Average monthly cost | Share of companies |
|---|---|
| Under $25 | 4% |
| $25-$45 | 5% |
| $45-$75 | 16% |
| $75-$100 | 11% |
| $100-$150 | 18% |
| $150+ | 46% |
In this case, just under half of all companies pay over $150 per month in workers’ compensation insurance. Comparatively, only 9% pay less than $45 per month.
Average workers’ compensation costs by number of employees
Small businesses typically have lower workers’ compensation insurance costs, partially due to having fewer employees. For instance, the average cost for businesses with only one employee is only $35 per month, whereas the average cost for those with 10+ employees is $116 per month.
Average cost of workers’ compensation by number of employees
| Number of employees | Average monthly cost |
|---|---|
| 1 | $35 |
| 2 | $40 |
| 3-5 | $56 |
| 6-9 | $79 |
| 10+ | $116 |
Average workers’ compensation costs by industry
One of the most significant variances in workers’ compensation insurance costs is the industry you work in. Industries with a higher injury risk have higher costs, and vice versa.
For instance, the construction and contracting industry has the highest average worker’s compensation costs, at $254 per month.
Conversely, the finance and accounting industry has the lowest average worker’s compensation costs, at only $33 per month.
Here are the details:
Average cost of workers’ compensation by industry
| Industry | Average monthly cost |
|---|---|
| Finance & Accounting | $33 |
| IT/Technology | $34 |
| Insurance Professionals | $36 |
| Consulting | $37 |
| Media & Advertising | $42 |
| Building Design | $44 |
| Professional Services | $45 |
| Therapy & Counseling | $47 |
| Real Estate | $47 |
| Healthcare Professionals | $54 |
| Photo & Video | $58 |
| Sports & Fitness | $64 |
| Personal Care | $70 |
| Retail | $83 |
| Food & Beverage | $107 |
| Cleaning Services | $147 |
| Manufacturing | $150 |
| Landscaping | $177 |
| Installation Professionals | $229 |
| Construction & Contracting | $254 |
Workers’ Compensation Insurance FAQ
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What is the average workers’ compensation claim?
The average workers’ compensation claim is $41,353 per person. Claims made by injured employees vary based on the type of injury. For example, a severe shoulder injury may cost as much as $100,000, while a less severe arm injury could cost as little as $20,000.
Regardless, the amount that’s actually paid out to an employee following a claim will almost always be less than the claim itself.
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What is the average workers’ compensation payout?
The average workers’ compensation payout is $22,535. That’s 45% less than the average claim, showing how workers are typically paid less than they believe they’re owed. On average, workers only receive two-thirds of their weekly wages during their injury period.
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What are the most common workers comp injuries?
Traffic and automobile injuries are the most common workers’ comp injuries. Slips, trips, and falls are also common, but as far as specific areas of the body, here is how you’re most likely to be injured:
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Lacerations
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Burns
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Contusions
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Fractures
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Strains
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Eye injuries
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Sprains
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How many categories of work-related injuries are there?
There are three main categories of work-related injuries. These include:
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Compensable Injuries. These are injuries that occur while the worker is working. It can include anything from cuts and bruises to bone fractures. These injuries often occur in high-risk jobs like construction.
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Occupational Illness. This includes illnesses and diseases caught as a result of occupational activity. Examples include lung or skin diseases, carpal tunnel syndrome, vision issues, and lead poisoning.
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Mental Health-Related Work Issues. Some jobs may result in mental health issues, like PTSD. In these cases, workers’ comp will also cover mental health injuries.
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Conclusion
Workers’ compensation insurance is a cost every employer should consider, especially those operating in high-risk industries. While the average cost is $78 per month, the true cost for your company will vary based on industry, number of employees, state, and more.
In general, the cost for companies is split almost 50/50 between those who spend less than $150 per month, and those who spend more. High-risk industries with several employees will pay more on average, while low-risk SMBs with few employees can expect to pay less.
References
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BLS – Workplace Injuries
Author
Jack Flynn is a writer for Zippia. In his professional career he’s written over 100 research papers, articles and blog posts. Some of his most popular published works include his writing about economic terms and research into job classifications. Jack received his BS from Hampshire College.
