How Much Does Workers' Comp Cost for Contractors in California?

Workers' compensation insurance is required by California law for any contractor with employees — and the cost varies significantly depending on your trade. Here's what you can expect to pay.

How Workers' Comp Rates Are Calculated in California

Workers' comp premiums in California are calculated based on a rate per $100 of payroll. The rate depends on your job classification code, which reflects how dangerous the work is. A roofer has a much higher rate than an office worker because the risk of injury is greater.

The basic formula is: Payroll ÷ 100 × Rate = Annual Premium

Typical Workers' Comp Rates by Contractor Trade

Below are approximate base rates per $100 of payroll in California. Actual rates depend on your experience modifier (X-Mod), safety record, and the carrier.

Example: What a Roofing Company Might Pay

If you're a roofing contractor with $200,000 in annual payroll and a rate of $20 per $100:

$200,000 ÷ 100 × $20 = $40,000/year

That's a significant cost — which is why it's critical to shop multiple carriers and work with an agent who specializes in contractor insurance.

How to Lower Your Workers' Comp Costs

• Maintain a good safety record to lower your X-Mod (experience modifier)
• Implement a written safety program
• Work with an independent agent who shops multiple carriers
• Consider a pay-as-you-go policy to improve cash flow
• Classify workers correctly — misclassification can cost you

Can I Get Workers' Comp as a Sole Proprietor?

If you're a sole proprietor with no employees, you're generally not required to carry workers' comp in California. However, many general contractors require subcontractors to carry their own workers' comp before they'll hire them. We can help you get the right coverage at the right price.