Short answer: Illinois workers’ comp premium is your payroll divided by 100, times the rate for each class code, times your experience mod if you have one, before credits, discounts and a small state surcharge. Across Illinois, the payroll-weighted average rate for 2023 policies was $1.21 per $100 of payroll in the regular market and $4.04 in the assigned risk plan, according to the Illinois Department of Insurance. Your own rate depends mostly on the work your employees do: office work costs a fraction of the average, and roofing costs many times it.
That makes “how much is workers’ comp” a question about your payroll and your class codes more than about the state. This guide shows how the premium is built, what moves it, where Illinois rates are heading, and what happens if no insurer in the regular market will write you. The estimator below runs the numbers on your own policy.
How the Premium Is Built
| Step | What happens |
|---|---|
| 1. Payroll by class code | Each employee’s pay is assigned to the class code for the work they do |
| 2. Manual premium | Payroll ÷ 100 × the insurer’s rate for that class, added up across classes |
| 3. Experience mod | Manual premium × your mod, if your premium is large enough to have one |
| 4. Schedule credits or debits | Where the insurer’s filed rating plan allows, adjustments for safety programs, management and other factors |
| 5. Premium discount | A percentage off for larger accounts, rising with premium size |
| 6. Minimum premium and expense constant | A floor and a flat charge that matter most for very small policies |
| 7. State surcharge | The Illinois Workers’ Compensation Commission operations fund surcharge, currently 1.092%, shown separately on the bill |
The premium on the policy is an estimate. After the policy year, the insurer audits your actual payroll and settles the difference, which is why a growing business can owe money months after the policy ended. Our guide to workers’ comp audits in Illinois covers that step.
An example at the state averages
A business with $250,000 of payroll at the statewide average voluntary rate of $1.21 would have a manual premium of about $3,025. With a 0.90 mod, that becomes about $2,720, plus the surcharge. The same payroll at the assigned risk average of $4.04 comes to about $10,100. The averages blend every kind of business in the state, so treat them as a reference point, not a quote; the gap between the two markets is the useful part.
Estimate Your Premium and Audit
Use the rate printed next to your main class code on your declarations page. The estimator applies your mod, adds what uninsured subcontractors would cost you at audit, and compares your payroll with the estimate your policy was priced on.
What Drives Your Rate
Your class codes
NCCI, the rating organization for Illinois, files a loss cost for each of several hundred class codes, reflecting what injuries in that kind of work cost. Clerical office employees, outside salespeople and similar classes sit near the bottom; roofing, framing, tree work and trucking sit near the top. The class assigned to your business, and to each employee, is the largest single factor in what you pay. An office manager who also works in the shop belongs in the shop’s class, and an employee who splits time between two kinds of work can only have payroll divided if your records show the hours.
Your insurer
NCCI’s loss costs cover expected losses. Each insurer adds its own expenses and profit by filing a multiplier with the Illinois Department of Insurance, as 215 ILCS 5/457 allows. Two insurers can start from the same loss cost and land on noticeably different rates for the same class, and their schedule rating plans and appetite for your type of business differ as well. That spread is why comp is worth comparing at renewal instead of rolling over.
Your claims
Once your premium is large enough to be experience rated, your claims history becomes a multiplier on everything above. A claim stays in the mod for three years, and several small claims usually move it more than one large one. Our guide to the experience modification rate explains the calculation and includes a calculator for what one claim costs.
Who is on the payroll
Owners can change the number. Sole proprietors, partners and LLC members are off the policy unless they elect coverage, and corporate officers can withdraw in writing. Subcontractors without their own coverage are added to your payroll at audit. Our posts on owners and ghost policies and on 1099 contractors cover both.
Where Illinois Rates Are Heading
Illinois loss costs have been drifting down. NCCI’s filing for January 1, 2026 lowered the overall loss cost level by 1.2%, and its filing for January 1, 2027, submitted July 30, 2026, proposes another 0.5% decrease, according to NCCI’s Illinois state summary. The same filings move the assigned risk plan the other way, up 0.8% for 2026 and a proposed 3.1% for 2027, which widens the gap between the two markets.
Those are averages across all classes; an individual class can rise while the overall level falls. Benefit changes feed into future filings too. Public Act 104-792, effective August 7, 2026, raised the burial benefit from $8,000 to $10,000 and changed utilization review rules for medical care.
If No Insurer Will Write You
Illinois law requires every licensed workers’ comp insurer to take part in a residual market, the Illinois Workers’ Compensation Assigned Risk Plan, so every employer can get coverage. To qualify, a business must have been turned down within the past 60 days by two unaffiliated insurers that write comp in Illinois, one of them the current or most recent insurer if there is one. Policies with an estimated premium of $1,000 or less must be paid in full, and the Commission surcharge is due before coverage binds.
About 3.1% of Illinois comp premium was written in the plan in 2023, across more than 26,000 policies. Given the price difference, the plan is a safety net to move out of: clean claims, accurate class codes and a documented safety program are what bring regular-market insurers back.
Ways to Keep the Cost Down
- Check every class code. Make sure each employee is in the class for what they do, and that office-only staff are in the clerical class.
- Keep overtime premium separate. The extra part of overtime pay can be left out of payroll when your records show it by employee and class.
- Collect subcontractor certificates. One uninsured sub can outweigh every other audit adjustment.
- Keep the payroll estimate current. Update it when you add people so the audit does not deliver the difference all at once.
- Manage claims. Prompt reporting and light-duty work keep claims smaller, and smaller claims keep the mod down.
- Compare insurers at renewal. Different multipliers and appetites mean the same payroll and classes can price differently from one insurer to the next.
Frequently Asked Questions
How much does workers’ comp cost per employee in Illinois?
It is priced per $100 of payroll, not per head. At the statewide average voluntary rate of $1.21 for 2023 policies, an employee paid $50,000 would cost about $605 a year before any mod or credits. An office employee costs far less than that and a roofer far more.
How is workers’ comp premium calculated in Illinois?
Payroll divided by 100, times the rate for each class code, gives the manual premium. Your experience mod multiplies that, then schedule credits or debits, premium discounts, any minimum premium and the state surcharge are applied. The final premium is set by audit after the policy year.
Why is my rate different from another company’s in the same trade?
Each insurer applies its own multiplier to NCCI’s loss costs and its own schedule rating plan, and each business has its own mod and class mix. Two businesses in the same trade can be in different classes for parts of their payroll as well.
What is the Illinois workers’ comp surcharge on my bill?
It funds the Illinois Workers’ Compensation Commission’s operations. It is currently 1.092% of premium and is shown separately from the premium on your bill.
Are Illinois workers’ comp rates going up or down?
Down, on average, in the regular market: NCCI lowered Illinois loss costs 1.2% for 2026 and has proposed a 0.5% decrease for 2027. Assigned risk plan rates are moving up. Your own premium can still rise with payroll, class changes or a higher mod.
What is the Illinois assigned risk plan?
The insurer of last resort for employers that cannot get coverage in the regular market. A business qualifies after two unaffiliated insurers decline it within 60 days. Coverage is guaranteed, but rates have averaged more than three times the regular market’s.
This article provides general educational information, not a quote or a rating determination. Statewide averages are from the Illinois Department of Insurance’s 2024 Workers’ Compensation Oversight Report and NCCI’s Illinois filing summaries; your premium depends on your class codes, payroll, experience, the insurer and its filed rating plan.
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- Workers’ compensation insurance in Illinois
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