PEO Workers' Comp Rates
How PEO Workers Comp Rates Are Set
Your PEO workers comp rate is not a random number. It is the product of your class code base rate, your experience modifier, and any PEO markup. Understanding how these three pieces fit together tells you exactly why your rate is what it is and how to get it lower.
Base rate, EMOD, and markup
Potential savings through group rating
Markup range some PEOs add
To compare your rates through us
Key Workers Comp Factors
Class Code Base Rate
Each job role has a filed base rate per $100 of payroll. Your mix of class codes sets the starting point for your rate.
Experience Modifier
Your EMOD scales the base rate up or down. Above 1.0 means you pay more than average. Below 1.0 means you pay less.
PEO Markup
Some PEOs pass workers comp through at cost. Others add 15 to 30 percent. This markup is the biggest hidden cost in many quotes.
Group Rating Discount
PEOs pool your payroll to earn group rating discounts that lower your effective rate below what you could get alone.
Loss History
Your claims experience over three to five years feeds your EMOD, which feeds your rate. Clean loss history means lower rates.
Schedule Credits
Some carriers offer schedule credits for safety programs, drug free workplaces, or return to work programs that reduce your rate.
The 3 Parts of a PEO Workers Comp Rate
Your PEO workers comp rate is built from three pieces. First is your class code base rate, which is filed with the state. Second is your experience modifier, which scales that base rate up or down based on your claims history. Third is any PEO markup, which is the amount the PEO adds over the pure cost. Your final rate equals base rate times EMOD times markup. Understanding this formula tells you exactly where your cost comes from.
- Base rate is filed with the state for each class code
- EMOD scales the base rate up or down based on claims history
- PEO markup is added over the pure pass-through cost
- Group rating discounts lower your effective rate
- Schedule credits can reduce your rate further
- Your final rate equals base rate times EMOD times markup
How PEO Group Rating Lowers Your Rate
The biggest advantage of PEO workers comp is group rating. A PEO pools your payroll with hundreds of other businesses. Large groups earn rating discounts from insurance carriers that individual small businesses cannot access. In Florida, trades like roofing, HVAC, and plumbing can see 20 percent or more in savings through PEO group rates. The discount comes from the pooling, not from the PEO doing you a favor.
Watch the PEO Workers Comp Markup
Not all PEOs pass workers comp through at cost. Some mark it up 15 to 30 percent. This markup is often the single biggest hidden cost in a PEO quote. Two PEOs with the same headline admin fee can have very different total costs because one marks up workers comp and the other does not. Always ask whether the rate is pass-through or marked up, and by how much. A broker surfaces this before you sign.
PEO Workers Comp Rates FAQ
How are PEO workers comp rates calculated?
What is a good PEO workers comp rate?
Do all PEOs charge the same workers comp rate?
How can I lower my PEO workers comp rate?
PEO Workers Comp Guides
PEO Workers Comp Savings
Where PEO workers comp savings come from and how much you can save.
PEO Workers Comp for Construction
Workers comp through a PEO for construction companies.
PEO Workers Comp for Contractors
Workers comp through a PEO for general contractors and trades.
PEO Workers Comp for Roofing
Workers comp through a PEO for roofing contractors.
PEO Workers Comp for Restaurants
Workers comp through a PEO for restaurants and food service.
PEO Workers Comp for Staffing Companies
Workers comp through a PEO for staffing and temp agencies.
PEO Workers Comp for Healthcare
Workers comp through a PEO for healthcare practices.
Workers Comp Experience Modification
How your experience modifier affects your workers comp cost.
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.
Pay-As-You-Go Workers Comp
How pay-as-you-go workers comp works through a PEO.
Workers Comp Alternatives for High-Risk Businesses
Workers comp alternatives when traditional coverage is too expensive.