Pay-As-You-Go Workers' Comp
Workers Comp Tied to Your Actual Payroll, Not an Estimate
Pay-as-you-go workers comp ties your premium to your actual payroll each pay cycle instead of an annual estimate. This eliminates large year end audit bills, smooths your cash flow, and makes your workers comp cost predictable. Most PEOs include pay-as-you-go workers comp as a standard feature.
Premium based on actual payroll
Large year end audit bills
Cash flow throughout the year
Feature with most PEOs
Key Workers Comp Factors
Actual Payroll
Your premium is calculated each pay cycle based on your actual payroll. No estimates, no true ups, no surprises.
No Audit Bill
Because you pay based on actual payroll throughout the year, there is no estimate to true up at year end and no large audit bill.
Cash Flow Smoothing
Your workers comp cost tracks your payroll. When payroll is up, you pay more. When it is down, you pay less. It follows your business cycle.
No Deposit
Most PEOs do not require a large upfront workers comp deposit. You start paying based on actual payroll from day one.
Predictable Budgeting
Because your premium is part of each payroll run, you know your workers comp cost in real time instead of guessing all year.
Class Code Tracking
Pay-as-you-go systems track your class codes by employee each cycle, ensuring accurate billing and preventing audit adjustments.
How Pay-As-You-Go Workers Comp Works
With traditional workers comp, you estimate your annual payroll, pay premium based on that estimate all year, and get audited at year end to true up the difference. With pay-as-you-go, there is no estimate. Each pay cycle, your payroll is reported to the carrier and your premium is calculated based on the actual payroll for that cycle. You pay exactly what you owe, when you owe it. No estimate means no audit true up and no surprise bill.
- Premium is calculated each pay cycle based on actual payroll
- No annual estimate to true up at year end
- No large audit bill or surprise refund
- No large upfront deposit premium
- Your cost tracks your actual business cycle
- Class codes are tracked by employee each cycle
Who Benefits Most from Pay-As-You-Go Workers Comp
Pay-as-you-go workers comp is especially valuable for businesses with fluctuating payroll. Seasonal businesses, construction companies, staffing companies, and any business with variable headcount benefit the most. Instead of estimating high and tying up cash, or estimating low and getting a big audit bill, you pay based on what actually happens. Your workers comp cost becomes a variable expense that follows your revenue, not a fixed guess.
How to Get Pay-As-You-Go Workers Comp
Most PEOs include pay-as-you-go workers comp as a standard feature. When you join a PEO, your workers comp premium is calculated each pay cycle based on your actual payroll run. You do not need to find a separate pay-as-you-go policy. The PEO handles it as part of the payroll process. A broker can confirm which PEOs offer pay-as-you-go and compare the total workers comp cost across options.
Pay-As-You-Go FAQ
What is pay-as-you-go workers comp?
How is pay-as-you-go different from traditional workers comp?
Does pay-as-you-go workers comp cost more?
Which businesses benefit most from pay-as-you-go workers comp?
PEO Workers Comp Guides
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How PEO workers comp rates are set and what drives them.
PEO Workers Comp Savings
Where PEO workers comp savings come from and how much you can save.
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Workers Comp Experience Modification
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Workers Comp Experience Mod Explained
A plain English explanation of your experience modifier.
How PEOs Calculate Workers Comp
The formula PEOs use to calculate your workers comp cost.
How PEO Workers Comp Rates Work
How PEO workers comp rate structures actually work.
Workers Comp Payroll Audit
How workers comp payroll audits work with a PEO.
Workers Comp Premium Reduction
Strategies to reduce your workers comp premium through a PEO.
Workers Comp Alternatives for High-Risk Businesses
Workers comp alternatives when traditional coverage is too expensive.