Remuneration vs Payroll in Workers Comp

July 6th, 2009
by Drew Roberts, CPCU, ARM

Landscaper Employee

Landscaper Employee

Many landscapers ask our insurance agents, “what is the difference between remuneration and the basic payroll I have for my employees?” In all states but one, Workers’ Compensation insurance uses ‘remuneration’ as the exclusive basis for computing premiums (the state of Washington currently allows contractors to use hours worked instead). Although payroll is the most common component of remuneration, it is not the only one. In Florida, the rules about remuneration are written by the National Council on Compensation Insurance (NCCI). But keep in mind that some states are non-NCCI jurisdictions, and there may be some significant differences in how remuneration is defined. In Florida, remuneration is the premium base used to calculate workers’ compensation premiums. It is generally referred to as payroll, but it includes more than the employees’ weekly paychecks as noted in the NCCI definition. Remuneration is defined to mean money and substitutes for money and it includes the following:

  • - Wages or salaries, including retroactive wages and salaries
  • - Total cash received by employees for commissions, draws against commissions, piecework, profit sharing, and incentive plans
  • - Bonuses, including stock bonus plans
  • - Pay for holidays, vacations, and sick leave
  • - Employees’ share of Social Security and similar statutory plans even if paid by the employer

Remuneration excludes some pay received by employees and the following can be deducted from the total remuneration:

  • - Overtime - the extra amount of pay above the regular wages may be excluded for overtime hours that are worked by employees.
  • - Tips
  • - Payments by employees for group insurance or pension plans
  • - Special awards for invention or discovery
  • - Severance Pay
  • - Executive officers have a minimum and maximum limits for their payroll if they are included on the policy
  • - Partners and Sole Proprietors have a fixed amount of payroll if they are included on the policy

Please refer to the article entitled ‘Introduction to Workers Compensation Insurance’ for more information on workers comp insurance for Florida landscaping businesses. If you have any more questions about the difference between payroll and remuneration and how this affects the premium on your workers’ compensation insurance policy, please do not hesitate to contact the agents at BearWise Landscapers.

4 Responses to “Remuneration vs Payroll in Workers Comp”

  1. Articles » Florida Workers Comp Rates for Landscapers Says:

    [...] The Florida rate for this classification in 2007 was 10.67 and in 2008 it is now 8.70 dollars for every 100 dollars of remuneration. [...]

  2. Articles » 2009 Florida Workers Comp Rates for Landscapers Says:

    [...] The Florida rate for this classification in 2008 was 8.70 and in 2009 it is now 7.11 dollars for every 100 dollars of remuneration. [...]

  3. Articles » Newest 2009 Florida Workers Comp Rates Says:

    [...] The current rate for class code 0042 is 7.11 dollars for every 100 dollars of remuneration. [...]

  4. Articles » Recommended Insurance: Small Landscaper Says:

    [...] protection for your business in the event that an employee gets injured. In Florida, for two employees with an annual remuneration of 30,000 dollars, you are looking at a total premium of [...]

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