Workers Compensation
Paychex Workers' Compensation Insurance: How Pay-As-You-Go Pricing Works (2026)
Paychex's integrated workers comp eliminates the annual premium deposit headache. Premiums are calculated and remitted each payroll cycle based on actual wages paid. Here's what it costs and how it compares.
$0.75-$3.00
Rate Range
Per $100 of payroll (varies by industry)
~$0.75-$1.00
Low-risk industries
Office, professional services
~$1.00-$2.00
Medium-risk
Retail, light manufacturing
$2.00-$3.00+
High-risk
Construction, healthcare
How Pay-As-You-Go Works
1
Connect to Payroll
Your workers comp policy links directly to your Paychex payroll account.
2
Run Payroll
Each time you process payroll, wages are reported to the insurance carrier automatically.
3
Auto Premium Calculation
Premium is calculated based on actual wages paid, by employee class code.
4
Direct Remittance
Paychex remits the premium directly to the carrier - no manual payments required.
Cost Example by Business Type
| Business Type | Rate/100 Payroll | Payroll $500k/yr | Annual Premium | Monthly via PAYG |
|---|---|---|---|---|
| Office/Professional | $0.80 | $4,000 | $4,000 | $333 |
| Retail Store | $1.25 | $6,250 | $6,250 | $521 |
| Restaurant/Food Service | $2.00 | $10,000 | $10,000 | $833 |
| Light Manufacturing | $1.75 | $8,750 | $8,750 | $729 |
| Construction (general) | $3.00 | $15,000 | $15,000 | $1,250 |
Cash flow advantage: Traditional workers comp requires a large deposit (often 25-35% of estimated annual premium) upfront. On a $10,000 annual premium, that's $2,500-$3,500 tied up. Pay-as-you-go eliminates this deposit entirely - premiums are spread evenly across each payroll cycle, improving cash flow throughout the year.
Frequently Asked Questions
How does Paychex pay-as-you-go workers comp work?
Paychex pay-as-you-go workers compensation integrates directly with payroll. Each time you run payroll, Paychex automatically calculates the workers comp premium based on actual wages paid by employee classification code, then remits it to the insurance carrier. This eliminates large upfront annual deposits and prevents audit surprises from payroll estimate changes. Paychex acts as administrator working with its carrier network.
How much does Paychex workers comp cost?
Paychex workers comp premium rates range from approximately $0.75 to $3.00 per $100 of payroll, varying by state, industry classification code, and claims history. For a 10-employee business with $500,000 annual payroll at a 1% rate, annual premiums would be approximately $5,000, or about $417/month via pay-as-you-go. Paychex facilitates through carrier partners and does not set the underlying premium rates - those are state-regulated.
Is Paychex workers comp more expensive than getting my own policy?
The underlying premium rate is typically similar whether you go through Paychex or directly to an insurer, since rates are regulated by state. The pay-as-you-go structure through Paychex may carry a small administration fee, but the cash flow benefits - no large upfront deposit, no audit risk from payroll estimate changes - often outweigh any marginal cost difference for most small businesses.