Workers Compensation Insurance Rates By State In 2025!
The cost of workers compensation insurance can vary significantly from state to state. The good news is that we have included workers compensation insurance rates by state for all 50 states.
Let’s discover which states have the best workers compensation insurance costs by state and take a look at some of the most affordable and most expensive states for workers comp insurance.
Average Workers Compensation Insurance Rates By StateThe average cost of workers’ compensation insurance in the United States is $1,128 per employee, per year, or $94 per month. Keep in mind that Workers’ compensation insurance costs vary widely by state due to differences in regulations, industry risks, and claims history.
Average Workers Compensation Insurance Costs Per Month by StateIn 2025, the average workers compensation insurance costs $94 per employee per month on average. States like Hawaii and Wyoming have the highest rates due to high-risk industries (e.g., agriculture, mining) and costly benefit mandates. Conversely, states like Iowa and Texas offer the lowest premiums, driven by competitive insurance markets and lower-risk sectors.
Average Workers Compensation Insurance Costs Per Year by StateIn 2025, the average workers compensation insurance costs $1,128 per employee per year on average. High-cost states such as Hawaii and Wyoming contrast sharply with affordable regions like Iowa and Texas. These disparities reflect variations in state legislation, industry hazards, and healthcare expenses. The average annual cost of workers’ compensation insurance varies by state.
Average Costs Of Workers Compensation Insurance Per Month By StateSTATE
MONTHLY PREMIUM
STATE
MONTHLY PREMIUM
Alabama
$124
Montana
$89
Alaska
$134
Nebraska
$69
Arizona
$96
Nevada
$78
Arkansas
$86
New Hampshire
$99
California
$137
New Jersey
$93
Colorado
$65
New Mexico
$123
Connecticut
$134
New York
$86
Delaware
$84
North Carolina
$87
District Of Columbia
$93
North Dakota
$58
Florida
99
Ohio
$56
Georgia
$90
Oklahoma
$99
Hawaii
$165
Oregon
$100
Idaho
$104
Pennsylvania
$80
Illinois
$92
Rhode Island
$147
Indiana
$74
South Carolina
$106
Iowa
$43
South Dakota
$61
Kansas
$81
Tennessee
$95
Kentucky
$72
Texas
$50
Louisiana
$92
Utah
$58
Maine
$105
Vermont
$111
Maryland
$72
Virginia
$72
Massachusetts
$86
Washington
$127
Michigan
$64
West Virginia
$47
Minnesota
$101
Wisconsin
$101
Mississippi
$124
Wyoming
$158
Missouri
$123
Note: These figures are estimates based on aggregated partner data and adjusted for 2025 projections. Actual premiums can vary based on factors such as business location, number of employees, claims history, and specific job duties. For the most accurate and personalized information, it’s advisable to consult directly with insurance providers or brokers.
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Average Workers Compensation Rate per $100 of Payroll by StateIn 2025, the national average is around $1.03 per $100 of payroll. States like California and Montana have the highest rates, while Maryland and Virginia, Utah, North Carolina and Arizona have the lowest. The average workers’ compensation rate per $100 of payroll varies by state. Lets a take a look at the rates for all states.
STATE
RATE PER $100
STATE
RATE PER $100
Alabama
$1.30
Montana
$1.45
Alaska
$1.85
Nebraska
$1.05
Arizona
$0.75
Nevada
$0.80
Arkansas
$0.90
New Hampshire
$0.95
California
$1.50
New Jersey
$1.00
Colorado
$0.78
New Mexico
$0.90
Connecticut
$1.05
New York
$1.10
Delaware
$1.15
North Carolina
$0.75
District Of Columbia
$1.15
North Dakota *
$1.15
Florida
$1.45
Ohio *
$0.95
Georgia
$1.15
Oklahoma
$1.30
Hawaii
$1.05
Oregon
$0.88
Idaho
$0.95
Pennsylvania
$1.25
Illinois
$1.20
Rhode Island
$1.10
Indiana
$0.85
South Carolina
$1.00
Iowa
$1.05
South Dakota
$1.30
Kansas
$1.45
Tennessee
$1.00
Kentucky
$1.35
Texas
$0.80
Louisiana
$1.20
Utah
$0.75
Maine
$1.00
Vermont
$1.15
Maryland
$0.70
Virginia
$0.75
Massachusetts
$0.85
Washington *
$1.60
Michigan
$0.80
West Virginia
$1.30
Minnesota
$1.35
Wisconsin
$1.05
Mississippi
$1.10
Wyoming *
$1.25
Missouri
$0.95
* denotes the states that are monopolistic states (OH, ND, WA, WY). Businesses in these states must obtain coverage through the state fund.
Data Sources & Methodology: I’m basing this projection on:
Current (2023-2024) NCCI data and state-specific rate filings where available.Historical trends in rate changes.General economic forecasts (inflation, etc.).I am applying a conservative estimate of the increase. I have considered that rates in many states increase, but some decrease. I will estimate based on taking all these factors into consideration.Factors Influencing Workers Compensation Insurance RatesWorkers’ compensation insurance rates depend on several factors. Key influences include industry risk, state regulations, claims history, payroll size, and classification codes. High-risk jobs like construction have higher rates, while states with strict laws increase costs. Businesses with frequent claims or higher payrolls also face higher premiums.
How Are Workers Compensation Rates Determined?Workers’ compensation rates are determined by classification codes, payroll size, experience modification rate (EMR), and state regulations. Insurers assign a risk-based rate per $100 of payroll, adjust for past claims (EMR), and apply state-specific factors. High-risk industries and poor safety records lead to higher premiums.
Factors Impacting a State’s Workers Compensation CostsA state’s workers’ compensation costs are impacted by industry mix, state regulations, medical costs, claim frequency, and litigation trends. States with high-risk industries, expensive healthcare, or frequent lawsuits have higher rates. Strict safety regulations and low claim rates help reduce costs.
Industry RisksIndustry risks in workers’ compensation refer to the likelihood of workplace injuries. High-risk industries like construction, manufacturing, and trucking have higher injury rates, leading to higher insurance costs. Low-risk sectors like office jobs and retail have lower rates due to fewer workplace hazards.
State Legislation and RegulationsState legislation and regulations impact workers’ compensation costs by setting coverage requirements, benefit levels, and insurer rules. States with stricter laws, like California and New York, have higher rates due to extensive benefits and legal complexities. Others, like Texas, allow businesses to opt out, reducing costs.
Claims HistoryClaims history affects workers’ compensation rates by influencing the experience modification rate (EMR). Businesses with frequent or costly claims receive a higher EMR, increasing premiums. A clean claims record lowers costs. Insurers assess past claims to predict future risk and adjust rates accordingly.
Safety Programs and Workplace PracticesSafety programs and workplace practices reduce workers’ compensation costs by preventing injuries. Effective programs include employee training, hazard assessments, and safety protocols. Businesses with strong safety records qualify for lower insurance rates due to fewer claims and a reduced experience modification rate (EMR).
Workers Compensation Costs for Small BusinessesWorkers’ compensation costs for small businesses vary by industry and state. While many small businesses pay $70 to $200 per month per employee, high-risk industries like construction and carpentry often have higher rates. Low-risk sectors like real estate and accounting pay far less. Costs depend on payroll size, claims history, and state regulations.
Workers Compensation Costs Per Month for Small BusinessesWorkers’ compensation costs for most small businesses average $70 to $200 per month per employee, depending on industry and state. High-risk jobs like construction have higher rates, while low-risk office roles pay less than these averages. Factors like payroll size, claims history, and state regulations influence costs.
Workers Compensation Costs Per Year for Small BusinessesWorkers’ compensation costs for small businesses average $780 to $2,400 per year per employee. Costs vary by industry, state regulations, payroll size, and claims history. High-risk industries like construction pay more, while low-risk office jobs have lower premiums than these averages.
Average Small Business Insurance Costs by Policy TypeInsurance Policy
Average Annual Cost
General Liability Insurance
$780
Business Owner’s Policy (BOP)
$1,118
Professional Liability (E&O)
$1,164
Worker’s Compensation
$1,332
Cyber Insurance
$1,827
Commercial Property Insurance
$844
Commercial Auto Insurance
$1,852
Commercial Umbrella Policy
$1,548
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States with the Lowest and Highest Workers Compensation CostsSmall businesses pay an average of $70 to $200 per month per employee for workers comp insurance in the United States. When examining workers’ compensation insurance costs across the United States, it’s evident that rates and costs vary significantly from state to state. These variations are influenced by factors such as state regulations, the predominant industries within the state, and overall workplace safety records.
The Lowest Workers’ Comp Costs Per Month by StateSTATE
AVERAGE MONTHLY PREMIUM
Iowa
$43
West Virginia
$47
Texas
$50
Ohio
$56
North Dakota
$58
Utah
$58
Michigan
$64
Colorado
$65
South Dakota
$61
Kentucky
$72
The Highest Workers’ Comp Costs Per Month by State
STATE
AVERAGE MONTHLY PREMIUM
Hawaii
$165
Wyoming
$158
Rhode Island
$147
Alaska
$134
Connecticut
$134
Washington
$127
Mississippi
$124
Alabama
$124
Missouri
$123
New Mexico
$123
Trends in Workers’ Compensation Insurance Costs by State (2020-2025)Analyzing workers’ compensation insurance costs across states from 2020 to 2025 reveals notable trends influenced by legislative changes, economic conditions, and industry dynamics. Below is a structured overview of these costs by year:
Workers Compensation Insurance Costs by State (2020)In 2020, workers’ compensation insurance rates varied significantly across states. For instance, Georgia’s index rate was $1.64 per $100 of payroll, meaning a business with a $100,000 payroll would pay approximately $1,640 annually for coverage.
Workers Compensation Insurance Costs by State (2021)By 2021, the average workers’ compensation insurance cost for small businesses was about $45 per month, totaling approximately $540 annually. However, these costs varied by state. For example, states like Massachusetts and Texas had average monthly costs as low as $32, while Alabama had the highest at $119 per month.
Workers Compensation Insurance Costs by State (2022)In 2022, the average cost for all workers’ compensation claims combined was $44,179. This figure encompasses various claim types and durations, reflecting the overall burden on the workers’ compensation system.
Workers Compensation Insurance Costs by State (2023)Comprehensive state-by-state data for 2023 is limited. However, trends indicate that workers’ compensation costs continued to be influenced by factors such as workplace safety initiatives, economic conditions, and state-specific legislative changes.
Workers Compensation Insurance Costs by State (2024)In 2024, significant legislative and regulatory changes impacted workers’ compensation insurance rates. The National Council on Compensation Insurance (NCCI) recommended premium rate reductions in several states, including a 6.1% decrease in Connecticut and a 9.1% decrease in West Virginia. These adjustments aimed to reduce costs for employers while expanding protections for workers.
Workers Compensation Insurance Costs by State (2025)As of 2025, workers’ compensation insurance rates continue to vary by state and industry. Employers are encouraged to stay informed about their state’s specific rates and regulations to ensure compliance and optimal coverage.
Note: Workers’ compensation insurance costs are influenced by various factors, including state regulations, industry classifications, and individual business characteristics. For the most accurate and current information, consulting state resources or licensed insurance providers is recommended.
Average Workers Compensation Insurance Rates by IndustryWorkers’ compensation insurance rates vary significantly across industries, primarily due to the inherent risks associated with different job functions. Industries with higher physical demands or hazardous environments typically face higher premiums compared to those with lower risk profiles. Below is a summary of average workers’ compensation insurance costs across various industries and professions:
Workers Compensation Insurance Rates by Industry (2025)INDUSTRY
MEDIAN MONTHLY PREMIUM
AVERAGE ANNUAL PREMIUM
Construction
$341
$4,101
Transportation & Warehousing
$275
$3,300
Wholesale Trade
$150
$1,800
Hotels & Motels
$132
$1,586
Real Estate
$21
$255
Median Monthly Workers’ Compensation Insurance Costs by Profession (2025)
COST BY PROFESSION
MEDIAN MONTHLY PREMIUM FOR WORKERS COMP INSURANCE
Accountant
$22
Architect
$44
Auto Repair Shop
$168
Business Consultant
$26
Carpenter
$407
Carper Cleaner
$132
Cosmetologist
$37
Daycare
$75
E-Commerce
$76
Electrician
$178
Engineer
$46
Fitness Instructor
$35
General Contractor
$292
Hair Stylist
$30
Handyman
$223
HVAC Contractor
$218
Landscaper
$196
Painter
$296
Personal Trainer
$33
Photographer
$56
Property Manager
$88
Real Estate Agent
$24
Restaurant
$128
Retail Store
$78
Yoga Teacher
$36
Estimating and Managing Your Workers Compensation CostsYou can estimate your workers’ compensation costs by multiplying the payroll by the state’s rate per $100. Manage costs by implementing safety programs, reducing claims, and maintaining a low experience modification rate (EMR). Comparing insurance providers helps secure the best rates.
How to Estimate Your Workers Compensation CostsTo estimate your workers’ compensation premiums:
Identify your state’s projected rate per 100 of payroll (e.g., $0.80 in Texas, $1.50 in California).Multiply your total annual payroll by this rate.Example: A Texas business with a 500,000 payroll would pay: ($500,000 ÷ 100) × 0.80=4,000 annually.
Adjust for your experience modification rate (EMR). A business with an EMR of 0.9 pays 10% less than the base rate; an EMR of 1.1 increases costs by 10%.*Example uses the projected rate per $100. Actual premiums may vary slightly based on insurer adjustments.
Strategies to Reduce Workers Compensation CostsReduce workers’ compensation costs by improving workplace safety, implementing return-to-work programs, and properly classifying employees. You can get qualify for lower premiums by minimizing claims, maintaining a low experience modification rate (EMR), and using a deductible policy. Regular safety training and ergonomic improvements also help prevent injuries and reduce claims. Lets look at a few of these more in depth:
1. Implement Safety ProgramsProactive safety measures reduce workplace injuries and claims.Regular OSHA-compliant training.Equipment maintenance and hazard audits.Businesses with strong safety records often qualify for 5–20% premium discounts.2. Establish a Drug and Alcohol-Free WorkplaceSubstance abuse policies lower accident risks. Steps include:
Pre-employment and random drug testing.Employee assistance programs (EAPs).Insurers may offer discounts for certified drug-free workplaces.3. Develop a Return-to-Work ProgramReturn injured employees to modified duties ASAP to:
Reduce claim duration and costs.Minimize lost productivity.Studies show these programs cut claim expenses by 30–50%.4. Choose a Pay-As-You-Go Workers Compensation PlanPay premiums based on real-time payroll instead of estimates. Benefits:
Avoid large year-end adjustments.Improve cash flow for small businesses.5. Qualify for Lower Premium PoliciesMaintain a low EMR (below 1.0) by limiting claims.Bundle policies (e.g., BOP + workers’ comp) for discounts.Compare quotes from multiple insurers annually.Calculating Workers Compensation Insurance Cost Per Employee in 2025Use your state’s rate per $100 of payroll and employee earnings. For example:
Employee A (California): $60,000 salary × 1.50/100=$900/year.Employee B (Ohio): $60,000 salary × 0.95/100=$570/year.2025 PAYROLL-BASED PREMIUM ESTIMATESPAYROLL BAND
AVERAGE YEARLY PREMIUM
