Workers Comp Cost for Remote Employees per $100 of Payroll, State by State

Short answer: budget the premium as annual payroll divided by 100, multiplied by the class rate, multiplied by your experience modifier. The class rate is the part you do not set and the part that moves most. On the Oregon DCBS 2024 premium index, state cost levels run from $0.50 per $100 of payroll in North Dakota to $2.52 in Hawaii, a spread of just over five times, against a national median of $1.09. For a $75,000 remote hire that is $375 a year at one end and $1,890 at the other, for identical coverage of an identical person doing identical work at a desk in a spare room.

Two things make remote hiring different from office hiring on this line. The state is chosen by where the candidate already lives rather than where you built an office, and it is decided at the point you accept a resume rather than at the point you sign a lease. So the number is set by hiring decisions, and most companies never look at it until the renewal audit.

The formula, and the part of it you can actually forecast

Every workers compensation premium in the country is built the same way:

(Annual payroll / 100) x class rate x experience modifier = manual premium

Payroll you know. The experience modifier is a multiplier comparing your claims history against the average for your classification, and it only applies once your premium volume crosses a state threshold, so most companies making their first few remote hires are paying the class rate flat with nothing to modify. That leaves the class rate, which is set per classification per state, and it is where the variance lives.

The honest caveat on every number in this article: the Oregon Department of Consumer and Business Services publishes the only consistent state-by-state comparison, and it is an index. It weights 53 NCCI class codes by Oregon's payroll mix, so it tells you reliably that Hawaii costs about five times North Dakota and about 2.3 times the national median. It does not tell you what a carrier will quote for a clerical remote employee, which prices well below the all-industry average because clerical work injures almost nobody. Use the index as a state multiplier. Get the absolute number from a quote.

What the state spread does to one hire

Take a $75,000 remote employee and apply the index as a state multiplier:

One hire, $1,515 a year between the extremes. Ten hires and it is $15,150. That is not a large number against $750,000 of payroll, which is the correct conclusion: workers comp is not a reason to pick a state. It is a reason to know which state before the offer goes out, because the wrong answer is not a slightly higher premium, it is an uninsured claim.

Distributed teams drift toward the expensive end, and the reason is not workers comp

Here is the part that does not show up until you add it up. Take a realistic eight-person distributed team and price each seat in the state that person actually sits in:

That team carries $920,000 of payroll and $11,932 of indexed workers comp cost, a blended $1.297 per $100. The same payroll benchmarked at the national median would be $10,028. The distributed team costs 19 percent more than the median, and no single decision caused it.

What caused it is that the two highest-paid seats sit in New York and California, which happen to be the third and fourth most expensive workers comp jurisdictions in the country. Cost-weighted averages do not care about how many states you are in, they care about where the payroll is. A remote team that pays the most in the states that charge the most will run above the median every year, and it will keep doing so until somebody looks at the blended rate rather than the headline rates. If you are choosing between states with the rest of the employer cost stack in view, best states to hire remote employees puts the tax and registration side next to this one.

Washington bills by the hour, which changes the answer entirely

One state does not use payroll as the exposure base at all. Washington's Department of Labor and Industries states it plainly: "In Washington, rates are charged as an amount per hour. When wages go up, the rate paid stays the same."

Follow that through for remote hiring and it produces a result nothing else in this article produces. Two full-time remote employees, a $180,000 engineer and a $50,000 support rep, both working 2,080 hours a year, cost exactly the same in Washington. In a payroll-rated state at the national median they cost $1,962 and $545, a difference of $1,417 a year for identical coverage. Washington is the only state where a senior remote hire carries no more workers comp cost than a junior one.

Two more Washington-specific facts worth having before you budget. L&I adopted a 4.9 percent average rate increase for 2026, which it puts at about $1.37 a week per full-time employee, and the average rate per $100 of payroll for 2026 lands at $1.50 before retro refunds. And Washington is the one state where employees pay part of the premium: L&I reports that workers carry on average about 24 percent of it, or 26 percent counting retro refunds, through a payroll deduction. Everywhere else, deducting workers comp from wages is not allowed and the whole cost is yours.

The class code changes on 1 July 2026, and the rate does not

NCCI filed Item B-1451 on 6 June 2025 to add classification code 8871, clerical telecommuter employees, to the Basic Manual. The Texas Department of Insurance notice of the filing records the proposed effective date as 12:01 a.m. on 1 July 2026 for new and renewal policies. The code covers clerical employees who telecommute more than half the time from a residence workstation separate and distinct from any employer location.

The budgeting point is the one everybody skips: 8871 initially carries the same loss costs and rating values as 8810, the standard clerical office code. Moving your office staff to remote work does not, on its own, change what you pay in the first year of the new code. The industry does not yet know whether a home office produces more or fewer compensable injuries than a corporate one, and 8871 exists so that it can find out. Expect the rate to diverge from 8810 in a few years, in whichever direction the claims go, and expect nothing this year.

Where this cost sits against everything else a remote hire costs

Workers comp is one of the smaller employer-side lines and one of the easiest to get structurally wrong. At the median it is roughly one percent of payroll. Employer FICA is 7.65 percent, state unemployment insurance runs to a few hundred dollars a year per employee, and health coverage dwarfs both. The reason it deserves its own decision is not size, it is that the penalty for skipping it is categorical rather than proportional. In California, operating without coverage is a misdemeanor carrying a fine of not less than $10,000, state penalties up to $100,000, and a stop order barring you from using employee labor until you fix it.

The state-by-state duty, including the 36 jurisdictions where one employee is enough and the four where a private carrier is not allowed to write the policy at all, is set out with a checker on our workers comp for remote employees page. The whole-hire arithmetic, including recruiting and onboarding, is on the cost per hire calculator, and the broader employer cost stack is on the cost of hiring an employee. If the person you are pricing is a contractor rather than an employee, none of this applies to them directly, but you will want their coverage evidenced instead, which is a tracking problem that certificate of insurance tracking software exists to solve, and the employee-versus-contractor line itself is worked through in remote 1099 vs W2 jobs.

The cheapest version of all of this is knowing the state before you interview rather than after you offer. Write the eligible states into the listing, keep the list current as your coverage expands, and the question never becomes urgent. Every listing on this board shows the work location and the pay range for exactly that reason, and posting starts at $199 a month on a flat fee rather than a per-click auction. If you are making a first hire outside your home state, hiring remote employees in another state covers the registration sequence that has to happen alongside the policy.