Essential Takeaways:

• Workers’ compensation is priced per $100 of payroll, not per employee.
• Job classifications determine the base rate.
• Connecticut rates range from under $0.40 for office roles to over $25.00 for roofing roles.
• The experience modification rate adjusts the entire premium upward or downward based on your claims history.
• Classification accuracy closes the gap between a planning estimate and a quoted premium.

Many small business owners in Connecticut think about workers’ comp the same way they think about payroll, which is per head. The problem is that workers’ compensation insurance CT premiums are not calculated that way, and approaching them as a flat per-person cost can result in budgets that don’t fare well in the annual audit.

The actual pricing unit is dollars per $100 of payroll, which is then multiplied by a job classification rate. Once you understand that structure, building a per-employee estimate is surprisingly straightforward.

Why “Per Employee” Is the Wrong Unit and the Right Question

Thinking in terms of per-employee is not wrong. In fact, it naturally connects to how owners approach hiring decisions. The issue is that the per-employee cost varies so widely by job type. As a result, a single average figure will not mean much on its own without knowing what the employee actually does.

An office administrator and a roofer at the same Connecticut business, both earning $50,000 per year, can carry workers’ comp costs that differ by more than $12,000 annually. This is simply how the classification system works, and it’s precisely why the per-employee framing needs a foundation in actual job functions to be useful.

How Workers’ Comp Is Actually Priced in Connecticut

The formula that is used to determine Connecticut workers’ compensation premiums is very straightforward. Divide the employee’s annual payroll by 100, multiply the result by the classification rate assigned to their job function, and then adjust the result using your company’s experience modification rate. Every job type has its own National Council on Compensation Insurance (NCCI) classification code that reflects the risks associated with the work.

Because two employees with identical salaries can have very different workers’ comp costs if their job functions differ, classification accuracy matters just as much as payroll accuracy. Errors in either direction usually become obvious during the annual audit, and they can be costly.

What Connecticut Businesses Are Paying Across Common Industries

The ranges below apply approximate Connecticut classification code rates to a yearly salary of $50,000. Keep in mind that actual rates vary by carrier, experience mod, and annual state filings, so these should be treated as planning figures rather than final numbers.

Industry	Approx. Rate per $100 Payroll	Est. Annual Cost at $50K Salary
Clerical and Office	$0.10 to $0.40	$50 to $200
Retail Sales	$1.00 to $3.00	$500 to $1,500
Restaurant and Food Service	$2.00 to $5.00	$1,000 to $2,500
Light Manufacturing	$3.00 to $7.00	$1,500 to $3,500
Landscaping	$5.00 to $12.00	$2,500 to $6,000
Construction and Roofing	$10.00 to $25.00	$5,000 to $12,500

Rates are approximate and for illustration only. For current Connecticut rate filings, refer to the Connecticut Insurance Department.

The Two Variables That Create the Wide Range in Those Estimates

The experience modification rate, or e-mod, is a multiplier that business insurers apply to the overall premium. A Connecticut business with a 1.20 e-mod will pay 20% more than the table estimates above, while one with a 0.85 e-mod, due to a clean claims record, can expect to pay 15% less. Those differences compound with each additional hire, so a business that adds several employees in a high-risk classification will feel the impact of the e-mod across all of them.

Payroll level is also important; a higher-paid employee in a high-risk classification will bear a proportionally higher workers’ comp cost than someone performing the same job function at a lower wage. Owners who plan by headcount alone and fail to account for wage levels regularly find their estimates fall short.

How To Build a Realistic Workers’ Comp Budget Before You Quote

Start with a complete list of every job function in your business, including part-time and seasonal roles. Determine which NCCI classification code each position is likely to fall under, then apply the approximate rate per $100 of expected annual payroll to each role and total the results. This figure will provide a helpful potential working budget before any formal broker conversation takes place.

An independent broker familiar with the Connecticut market will verify those classifications before the policy is written, protecting your business from finding a miscoded employee during an audit. In fact, most audit surprises are classification errors that could have been caught much sooner if an upfront review had been carried out. The Connecticut Insurance Department and NCCI are two reliable resources to consult before meeting with a broker.

Get an Accurate Workers’ Comp Budget for Your Connecticut Business

Contact JMG Insurance Corp today for a workers’ comp quote built on correctly classified payroll. Our team will guide your Connecticut business through every line of the calculation, so your workers’ compensation insurance budget reflects what you will actually pay, not what you estimated before the audit.