The National Council on Compensation Insurance (NCCI) assigns a risk classification code to every occupation in the state. Each classification code represents employers with similar exposures. The codes are used to classify workers’ compensation rates, based on the loss experience of employers within each code. In the example below, you can see that masons in Utah use the classification code 5022.
Example: Mason = 5022
Base Rate: Each classification code is assigned a specific dollar amount — or base rate — that is determined by how hazardous the occupation is for workers. The base rate is used to determine an individual employer’s full workers’ compensation premium. Base rates are revised each year.
In the example below, we use the base rate of $5.93 for a mason in Utah.
Example: Mason = 5.93%
Base rate % x (Payroll/100)
Step 1: $100,000 Payroll / $100 = 1,000
Step 2: 1,000 X 5.93 (base rate) = 5,930
Estimated workers' comp premium: $5,930.00