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The following is a guest blog post by Brian Barrett,
Area Sales Manager at PrimePay.
An easy way to improve the cash flow for your business is simply to change how you pay for your workers’ compensation insurance. By switching to a “pay as you go” workers’ comp program, your premium is paid over the course of a year according to your payroll processing schedule and is based on your exact payroll figures. For example, a business on a weekly payroll frequency would spread their annual premium payment out over 52 payments. Workers’ comp insurance is required by law for most states and is a direct function of payroll.
If your business is not utilizing a pay as you go program, a large down payment is usually required to get the policy started and then payments are made on a quarterly basis. The policy is based on estimated payroll figures for the year and often includes a lengthy audit at the end of the policy. This year-end audit compares your actual payroll figures to the estimated amount which in turn can result in a hefty adjustment to make the policy whole.
Switching your workers’ comp insurance policy to a pay by pay program provides three main benefits for businesses including…
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