Workers' compensation is insurance that provides benefits to employees who experience a job-related injury or illness. In CoAd it is managed through three components — a plan, a code and a rate table — and premiums are calculated from employee earnings.
The three components
| Component | What it is |
|---|
| Plan | Tied to a state and insurance carrier |
| Code | A classification that defines the type of work performed |
| Rate Table | Contains rates for each code over a specific time period |
How workers' compensation works
- Employees are assigned workers' compensation codes through their positions (or jobs, if configured).
- The system determines the correct rate based on the employee's work location and the assigned code and plan.
- Premiums are calculated automatically based on employee earnings.
How premiums are calculated
Workers' compensation premiums are calculated outside of payroll using this formula:
Premium = Rate × (Earnings / 100)
Example: if an employee earns $38,000 and the rate is 1.08:
(38,000 / 100) × 1.08 = $410.80
Reporting
Use these standard reports to review workers' compensation data:
- Workers Compensation
- Workers Compensation Per $100 of Payroll
You can also use configurable reports (like General Ledger or Payroll reports) for deeper analysis.
Setting up workers' compensation
Basic setup steps:
- Add the Workers' Compensation (WrkrComp) earning code to applicable employees.
- Add a Workers' Compensation Plan (by state and carrier).
- Add Workers' Compensation Codes to your company.
- Add a Rate Table to the plan.
- Assign codes to positions (or jobs, if applicable).
Manage workers' compensation plans
Add a plan
Use when you start coverage in a new state, or you change insurance carriers.
- From the navigation menu, click More.
- From the Payroll menu, select Workers' Comp.
- Enter the start date, state, carrier and plan name.
- Click Submit.
Edit a plan
Use when updating plan details (not rates), or extending or correcting plan information.
Note: changing the state requires creating a new plan, and changing the carrier requires a new plan.
Remove a plan
- End Date — use when the plan has expired.
- Undo — use if the plan was added incorrectly (removes all related data).
Important: Undo cannot be reversed.
Manage rate tables
Add a rate table
Use when rates change, or a new policy period begins.
- From the navigation menu, click More.
- From the Payroll menu, select Workers' Comp.
- Select a plan and click Rates.
- Click Add Rate Table.
- Enter the effective date.
- Enter rates for each code.
- Click Submit.
Important: rates are entered per $100 of payroll. Example: enter 0.0125 for a $1.25 rate.
Edit a rate table
Use this to correct rate errors. Updates automatically recalculate premiums for that period.
Manage workers' compensation codes
Add a code
- From the navigation menu, click More.
- From the Payroll menu, select Workers' Comp.
- Click Add under Company Workers Comp Codes.
- Select the profile (e.g., NCCI or state-specific) and the code.
- Click Submit.
Delete a code
Deleting a code is only possible if the code is not assigned to any position.
Additional notes
- Codes are typically based on NCCI standards or state-specific lists.
- Multiple states may require multiple plans and codes.
- Always ensure positions are assigned the correct code for accurate premiums.
Next steps
- Run workers' compensation reports to review premiums.
- Verify all positions are assigned correct codes.
- Update rate tables when policies or rates change.
Frequently asked questions
What is workers' compensation insurance?
Workers' compensation is insurance that provides benefits to employees who experience a job-related injury or illness.
How are workers' compensation premiums calculated?
Premiums are calculated outside of payroll using the formula Premium = Rate x (Earnings / 100). For example, an employee who earns $38,000 at a rate of 1.08 produces a premium of $410.80.
What are the three parts of a workers' compensation setup?
Workers' compensation is managed through a Plan, which is tied to a state and insurance carrier; a Code, which is a classification that defines the type of work performed; and a Rate Table, which contains rates for each code over a specific time period.
How are workers' compensation rates entered?
Rates are entered per $100 of payroll, so a $1.25 rate is entered as 0.0125. Editing a rate table automatically recalculates premiums for that period.
When do I need to add a new workers' compensation plan?
Add a new plan when you start coverage in a new state or change insurance carriers. An existing plan's state or carrier cannot be edited; either change requires creating a new plan.
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