How Much Is Workers' Comp Insurance? 2026 Costs in California and Illinois

How much is workers' comp insurance? It's priced per $100 of payroll, and the rate depends on what your employees do. In California, the average advisory rate for policies starting on or after September 1, 2026 is $1.65 per $100 of payroll. A clerical employee costs a fraction of that, while caregivers and construction workers cost much more. Illinois rates are set by each insurer on top of benchmark loss costs that dipped slightly for 2026.

Below we walk through how the math works, what real rates look like for common job types, and what you can do to keep your premium down. We've placed workers' comp for California and Illinois employers since 1981, so we'll also flag the mistakes that most often lead to a surprise bill at audit time.

Key takeaways

• Your premium is roughly (payroll ÷ 100) × your class code rate × your experience mod, plus insurer adjustments and state fees.
• California's approved advisory pure premium rates rose an average of 6.6% for policies incepting on or after September 1, 2026, the first meaningful increase after about a decade of declines.
• For Illinois, the rating organization NCCI filed a 1.2% decrease in voluntary-market loss costs effective January 1, 2026.
• Per employee, a $50,000 clerical worker in California runs about $107 a year in pure premium, while a $50,000 caregiver runs about $1,397, before insurer expenses and fees.
• Getting the class code right is the single biggest lever on cost. Misclassified payroll is the most common reason premiums jump after an audit.

How workers' comp premiums are calculated

Every state follows the same basic formula, even though the numbers differ:

1. Payroll by class code. Each type of work has a classification code. Your estimated annual payroll is split across those codes.
2. Rate per $100 of payroll. Each class code has a rate. Divide the payroll for that class by 100 and multiply by the rate.
3. Experience modification (x-mod). Once your business is large enough to be experience rated, your own claims history adjusts the premium up or down compared with similar businesses.
4. Insurer adjustments. Carriers apply their own expense loads, schedule credits or debits (for things like safety programs), and discounts.
5. Fees and minimums. State assessments are added, and most carriers charge a minimum premium for very small policies.

At the end of the policy term, the insurer runs a premium audit to compare your estimated payroll with what you actually paid. If payroll grew or employees were in a more expensive class than estimated, you owe the difference.

What workers' comp costs in California

California has its own rating bureau, the Workers' Compensation Insurance Rating Bureau of California (WCIRB). Each year the WCIRB proposes advisory pure premium rates, and the Insurance Commissioner approves them. A pure premium rate covers expected claim costs only. Insurers add their own expenses and profit on top, so the rate you're quoted will usually be higher than the advisory number.

For policies starting on or after September 1, 2026, the WCIRB had proposed an average increase of 10.4%. The Commissioner approved a smaller one: an average of $1.65 per $100 of payroll, up 6.6% from the September 1, 2025 rates. The WCIRB also reported that average charged rates in early 2026 were running about 6% higher than in 2025, reversing a long decline.

How much rates vary by job type

The class code is what moves the number. Clerical office employees (class 8810) are among the lowest-rated classes at about $0.21 per $100 of payroll, while home care aides (8827) run about $2.79 and residential care facility staff (9070) about $5.21, based on the approved advisory rates effective September 1, 2026. Insurer rates will differ. You can look up any California class with our class code search.

A California example

Say you run a home care organization with $400,000 in caregiver payroll and one office manager earning $60,000.

• Caregivers (8827): $400,000 ÷ 100 × $2.794 = $11,176
• Office manager (8810): $60,000 ÷ 100 × $0.214 = $128

That's about $11,300 in pure premium before the insurer's expense load, your experience mod, and state fees. Notice how little the clerical payroll adds. That's why it matters so much that office staff are reported under 8810 rather than lumped in with caregivers.

What workers' comp costs in Illinois

Illinois works differently. The National Council on Compensation Insurance (NCCI) files advisory loss costs for each class code with the Illinois Department of Insurance. Each insurer then applies its own multiplier for expenses and profit to arrive at its rate. Two Illinois businesses with identical payroll can get noticeably different quotes from different carriers, which is why shopping the market pays off here.

For 2026, NCCI filed a 1.2% decrease in voluntary-market loss costs effective January 1, 2026, citing slightly better claims experience and the state's medical fee schedule. NCCI also filed a small 0.8% increase for the assigned risk market, which is where businesses land when no insurer will write them voluntarily.

Illinois uses the NCCI classification system, so codes differ from California's. Home health workers, for example, are usually classified under NCCI code 8835, while clerical staff use 8810. The formula is the same: payroll ÷ 100 × rate × experience mod.

Illinois requires coverage as soon as you have one employee, even part-time, and the penalties for going without are steep. Our Illinois insurance page covers the details.

What drives your premium up or down

• Class codes. A caregiver costs roughly 13 times more per $100 of payroll than a clerical employee in California. Make sure each employee is in the right class and that payroll is split where the rules allow it.
• Total payroll. More payroll means more premium. Overtime is often counted at straight-time pay for premium purposes in both states, so keep overtime records separate.
• Claims history. Frequent claims raise your experience mod for three years. A strong return-to-work program keeps claim costs, and your mod, lower.
• Safety practices. Documented training and safety programs can earn schedule credits from some carriers.
• The carrier you choose. Especially in Illinois, insurers price the same risk differently.

Five ways to lower your workers' comp cost

1. Audit your class codes once a year. Job duties change. A coordinator who used to visit clients and now works only in the office may qualify for a much cheaper class.
2. Keep clean payroll records. Separate payroll by class code and track overtime. Good records are the best defense against audit surprises.
3. Consider pay-as-you-go billing. Premiums are calculated from each payroll run instead of an annual estimate, which avoids a large deposit and a big audit bill.
4. Manage claims actively. Report injuries right away and bring people back on modified duty when it's safe. Both reduce claim costs.
5. Work with an independent agent. An agent who places coverage with several carriers can compare pricing and catch classification errors before they cost you.

To find your class, search any job in our California class code lookup. State-specific coverage details are on our California workers' compensation and Illinois workers' compensation pages.

Get a workers' comp estimate in two minutes

Want a number for your own business? Our online estimator gives California and Illinois employers an instant workers' comp premium range based on payroll and class code. If you like the number, you can apply on the spot, and a licensed Bliss Marc agent will follow up.

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You can also learn more about our workers' compensation insurance programs or read our primer on California workers' comp.

Frequently asked questions

How much is workers' comp per employee?

There's no flat per-employee price because premiums are based on payroll and job type. Using California's 2026 advisory rates, a clerical employee earning $50,000 works out to about $107 in pure premium, while a caregiver earning the same amount is about $1,397, before insurer expenses and fees.

Is workers' comp required if I have only one employee?

Yes, in both states. California Labor Code section 3700 requires every employer with employees to carry coverage, and Illinois requires it with even one part-time employee.

Why did my premium go up after the audit?

The most common reasons are higher actual payroll than estimated, employees reported in the wrong class code, or uninsured subcontractors whose payroll gets added to your policy. Collect certificates of insurance from every subcontractor.

Are California workers' comp rates going up in 2026?

Yes. Approved advisory pure premium rates for policies starting on or after September 1, 2026 average 6.6% higher than the prior year. Your actual change depends on your class codes, claims, and carrier.

Are Illinois workers' comp rates going down in 2026?

Slightly. NCCI filed a 1.2% decrease in voluntary-market loss costs for January 1, 2026. Because each insurer applies its own multiplier, your renewal could still go up or down.

This article is general information, not legal or tax advice. Rates shown are advisory benchmarks; actual premiums depend on underwriting, carrier, and your business details. Bliss Marc International Corporation is a licensed insurance agency, California License #0H92044 and Illinois License #100299879.