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What Is the Minimum Workers Comp Premium?

Every workers comp policy has a minimum premium regardless of payroll — here’s what to expect and how it affects ghost policies and small contractors.

• ✓Minimum premiums typically range from $500 to $1,500 annually
• ✓Ghost policies are usually priced at or near minimum premium
• ✓Minimum payroll floors set by state or carrier drive the calculation
• ✓Minimum premiums are non-negotiable but carrier choice can affect the floor

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Why Minimum Premiums Exist

Workers comp carriers incur fixed costs — policy issuance, compliance, certificate processing, potential claims investigation — regardless of the size of the insured. A minimum premium ensures the carrier recovers those administrative costs even for the smallest policies.

The minimum is calculated by applying the class code rate to a minimum reportable payroll floor set by the state or carrier. For example, if the minimum payroll floor is $10,000 and the class code rate is $5.00 per $100, the minimum premium is $500. States with higher floors produce higher minimums.

For most mid-size and larger contractors, the minimum premium is irrelevant — their actual payroll produces a premium well above the floor. It primarily affects sole proprietors, ghost policy clients, and very small part-time operations.

Minimum Premiums by Trade

Roofing has the highest minimum premiums because the class code rate is high — even when applied to a minimum payroll floor. A roofing ghost policy in many states costs $1,200 to $2,000+ annually due to the combination of high rate and minimum payroll floor.

Interior trades and landscaping have lower minimum premiums — often in the $500 to $800 range — because the base rate applied to the minimum floor produces a smaller dollar amount.

Shopping carriers matters even for minimum premium policies. Different carriers have different minimum premium floors, and some carriers are more aggressive in writing certain trades at minimum. We compare across carriers to find the lowest minimum premium available for your trade and state.

You Might Also Find Helpful

• Ghost Workers Comp Policies for 1099 Contractors
• Workers Comp Cost for Contractors
• How Much Does Workers Comp Cost for a Contractor?
• Sole Proprietor Workers Comp Coverage

Need the Lowest-Cost Policy That Still Satisfies Requirements?

We find the carrier with the lowest minimum premium for your trade and state — so you’re legally covered and client-ready at the smallest possible cost.