Once classification assignments have been made, payroll data is reported to the WCIRB based on these assignments. One of the primary components of the rate that an employer pays for their workers' compensation insurance policy is determined by the classification code(s) to which that payroll is assigned. Also, the items that constitute payroll when determining the basis of workers' compensation insurance premium are quite specific. Detailed information about what constitutes payroll, often referred to as remuneration, can be found in the Publications and Filings section.
When determining the basis of premium, the following are included as payroll: gross wages; salaries; commissions; all bonuses; most profit sharing; vacation, holiday and sick pay; overtime ("straight time" portion only); the market value of gifts; and automobile allowances (less reimbursement for documented expenses).
The following items are excluded from payroll when determining the basis of premium: meals or lodging (unless the classification phraseology specifically includes them or unless they are provided in lieu of wages); tips; overtime excess pay (the increase above the regular hourly wage); severance pay (except for accrued vacation, sick pay, commissions, and bonuses); employer contributions to qualified insurance, stock, or retirement plans; stock options; and the value of an automobile furnished to an employee. In addition, the following are not included as payroll for premium computation: employee discounts for merchandise; meals provided at no charge at the work location; residual payments for commercials; or a uniform allowance.
Payroll for workers' compensation insurance purposes is not necessarily the same as the Internal Revenue Service definition of payroll.
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