How to Fill out the Payroll Report for Workers Comp
Workers' compensation is a program run separately by each state to pay employee medical bills if employees are hurt at work and also to pay them for work they miss because of these injuries. Like car insurance policies, employer rates for workers' comp are based on track records of keeping employees safe and avoiding expensive claims. Employers must file and pay workers' comp taxes quarterly, basing payment amounts on total payroll volume.
In most states, you can fill out a payroll report for workers' comp either on paper or online through the website for your state's department of labor and industries. When you initially file for your state business license, the application will ask whether you plan to hire employees. If you answer affirmatively, the state will automatically register you with its labor and industries division, assigning you an account number and entering your information into its system to receive paper reports in the mail if your state uses a paper system. Use this account number on all labor and industries paperwork and also to log into your online account to file and pay.
Workers' comp rates are based on the total number of hours worked by all of your employees rather than on the total amount they earn. If you use payroll accounting software, your program will allow you to pull this number based on the ongoing entries you have made. If you use another method for calculating paychecks, keep an ongoing record of total employee hours during each pay period to simplify the process of filing for workers' comp.
In addition to your company's safety track record, your workers' comp rate is also based on your industry's overall safety risk: Office workers tend to hurt themselves at work less frequently than welders do, so the tax rate for welders is higher. Your tax rate and industry classification are based on the information you provide about the nature of your business when you initially open your labor and industries account. Your tax rate will appear on the form the agency sends you at tax time, or it will automatically appear on your form when you log into your account online. Multiply your tax rate by the number of hours your employees have worked to calculate the amount of tax you owe. For online filers, the agency website will perform these calculations for you.
Pay your state's labor and industries department by including a check with the paper form you mail or making an electronic payment when you file online. Paying after the quarterly deadline will cause you to incur additional penalties and interest. If you file online, the website will calculate these add-ons for you. If you file a paper form, it will come with instructions for calculating these additional amounts.