Every painting business gets an annual workers' comp audit that compares your estimated payroll at year start to what you actually paid out. If you paid less than estimated, you get a refund. Higher actual payroll means a higher premium.
Business owners hear the word audit, immediately panic starts to happen. Everyone who has workers' comp is audited every year. There are different kinds of work comp audits. Workers' comp is based on the actual payroll that you pay out to your employees. When you get your workers' comp premium calculated at the beginning of the year, that's an estimate. You give them estimated payroll numbers. So when we get to the end of the policy year, the workers' comp carrier wants to figure out how much did you actually have and what categories did that payroll fall? What did you pay out for painters? What did you pay out for admin? Did you have a really great a great year and you had much higher payroll than you anticipated, or was it a slower year and you didn't have as much payroll as you anticipated? That's important to remember. I've heard a lot of people say, oh, you never get a refund on your workers' comp policy. That's not true, but you don't want a refund on your workers' comp policy because that means that your business probably did not grow as much as you anticipated, and so your payroll was lower. I've absolutely seen refunds, or return premium is what it's called, at the end of the year. The carrier wants to make sure that you're paying an accurate amount.
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