Compare workers’ comp rates by state

Workers’ compensation insurance provides important protections for your employees and your business. However, the cost of workers’ compensation will vary depending on several factors – including the state where you do business.
Continue reading to learn more about states with high and low rates for workers’ comp, how those rates are calculated, and steps employers can take to keep costs down.
You can also start a free online application to compare specific quotes for your business and location with Insureon.
How are workers’ comp rates determined?
Every state has its own requirements for workers’ compensation, and each state has a rating bureau that sets the baseline cost (or rate) used in calculating how much you’ll pay in insurance premiums.
In general, a state’s rates are based on a combination of the following:
- Business risks
- Benefit levels
- State-specific regulations
- Healthcare costs
While some states have established their own rating bureaus, most rely on the National Council on Compensation Insurance (NCCI). NCCI is a private company that gathers workers’ comp data, analyzes trends, and makes rate recommendations to states.
In most states, you have the option to compare quotes with private insurance carriers or a state workers' comp fund. However, North Dakota, Wyoming, Ohio, and Washington only allow businesses to purchase a policy through a workers’ compensation state fund.
Workers’ compensation laws in your state

What states have the lowest (and highest) workers’ compensation costs for employers?
The National Academy of Social Insurance recently published a study that compares employer workers’ compensation costs by state in 2020 (the most recent year with available data).
The methods used for estimating employer costs vary based on whether insurance is provided by a private carrier or state fund, and several factors are used to calculate costs by state.
These include:
- Total premiums and deductibles paid to private insurers or state funds
- Benefits paid by employers
- Payments to special funds such as second injury funds
- Employers’ administrative costs
The report [PDF] shows a downward trend in employers’ overall workers’ comp costs. The costs per $100 in covered wages decreased in every state between 2016 and 2020.
The lowest workers' comp costs by state jurisdiction are:
- District of Columbia: $0.41
- Texas: $0.46
- Michigan: $0.61
- Virginia: $0.61
- Arkansas: $0.63
- Indiana: $0.64
- Tennessee: $0.64
The highest workers' comp rates by state jurisdiction are:
- Wyoming: $1.78
- Alaska: $1.74
- Hawaii: $1.69
- Montana: $1.64
- South Carolina: $1.55
- Idaho: $1.47
The pandemic's impact on workers' compensation benefits varied across the states with changes ranging from a 5% increase to a 22% decrease. During the first year of the pandemic, only three states—Hawaii, Oklahoma, and South Carolina—saw an increase in standardized benefits. Alabama, North Dakota, and Virginia observed the largest benefit decreases.

What factors impact a state’s workers’ comp costs?
A state’s mix of industry risk as well as changes in state workers’ compensation laws that affect covered benefits or medical costs can cause a state’s employer costs to rise or fall. Negotiations between legislators, business lobbies, insurance companies, and unions on workers’ compensation benefits can also impact costs.
For example, in 2013 North Dakota made significant changes to their workers’ comp laws, including tightened restrictions on benefits. As a result, the state’s employer costs declined about 30% from 2015 to 2019.
While employer costs vary widely among states, this doesn’t mean that a state with lower employer costs will offer a more favorable climate for your business. A state’s costs depend on a number of considerations, including the mix of high-risk and low-risk industries.
For example, Alaska’s top industries include oil and gas, construction, and fishing. These high-risk professions mean higher overall employer costs – but it doesn’t mean that a low-risk business like an accounting firm would pay more for workers’ comp coverage in Alaska than another state.
Which region has the lowest workers' comp costs?
Each region of the United States has states with low and high costs. For example, although California has one of the highest rates for workers’ compensation insurance at $1.45 per $100 in employee wages, the states that border it (Arizona, Nevada, and Oregon) all have costs at $1.00 or less.
Although each state’s specific formula for determining workers’ comp rates may be a little different, they follow the same general guidelines.
How can you estimate your workers’ comp costs?
Workers’ compensation insurance is required for most businesses in most states, so it’s an expense that must be calculated into your budget if you have employees. Timing is also important when buying workers' comp coverage.
Most states re-evaluate workers’ compensation rates on an annual basis. Although each state’s specific formula for determining workers’ comp rates may be a little different, they follow the same general guidelines.
For business owners, the amount you will pay in workers' compensation premiums depends on:
- Your payroll. If your business operates in multiple states, it would depend on the number of people you employ who work in each state
- Claims history. Insurance rates for almost any insurance policy depend, in part, on past workers’ compensation claims – the type, amount, and frequency of losses
- Worker classification codes. The level of risk associated with your business will also play a role in determining your workers’ comp rates. Class codes categorize every business and job type by level of risk, and your small business may have a range of worker classifications
Review requirements and rates for workers’ compensation insurance in your state, or speak with one of our expert insurance agents who are licensed nationwide and happy to answer your questions.
How can you keep your workers’ comp costs down?
While you can’t control the level of risk in your industry, there are strategies you can use to help lower your workers’ compensation costs.
Reduce workers’ comp injury risks at your business
These workplace safety tips can help reduce the frequency and severity of workers’ compensation injuries at your small business:
- Train workers on proper safety protocols
- Have emergency procedures in place
- Supply employees with the proper gear to keep them safe
- Require proper footwear
- Post signs and labels where there are hazards
- Maintain tools and equipment
- Maintain a clean workplace
- Consider ergonomic furniture and equipment
Establish a return-to-work program for injured workers
If one of your employees suffers a workers’ comp injury, a return-to-work program can help speed their recovery and get them back on the job faster.
Instead of waiting until an employee is recovered enough to resume all of their full-time job duties, a return-to-work program that allows them to perform light or modified work can ease them back in slowly.
These programs may also include retraining employees on a different skillset so they can earn their full pre-injury pay, instead of the partial wages paid under workers’ comp.
When employees come back to work sooner, you save money on wages paid to any temporary employees you had to hire while your injured worker was recovering.
Find workers' comp quotes from trusted carriers with Insureon
Insurance can be a tricky thing to navigate on your own, which is why our industry-trained insurance agents do the hard work for you. We're already familiar with your state's workers' comp laws and can provide a free consultation to help you find the insurance policy that complies with those regulations.
Complete Insureon’s easy online application today to compare insurance quotes from top U.S. carriers. Once you find the right policy for your small business, you can begin coverage in less than 24 hours.