Traditional workers’ comp asks you to predict a year of payroll, pay a chunk up front, and settle the difference at audit. Pay-as-you-go workers’ comp flips that: your premium is calculated from your actual payroll, every pay period, automatically.
How it works
- Your policy is set up like any other — same coverage, same protection for your employees
- Each payroll run, your reported wages sync (often directly from your payroll provider)
- Premium for that period is calculated on real numbers and drafted — no estimating
- Year-end audits become reconciliations of data you already reported, not surprise bills
Why businesses switch
Cash flow. Little to no up-front deposit, and premium tracks payroll — light months cost less. Accuracy. The estimate-then-audit cycle that produces premium audit surprises mostly disappears. Simplicity. When payroll and comp billing run together, one more thing stops needing your attention.
Who benefits most
- Seasonal businesses — landscaping, hospitality, construction — whose payroll swings month to month
- Growing companies — hiring fast means estimates go stale fast; pay-as-you-go keeps up automatically
- Cash-conscious startups — skipping the big deposit keeps working capital working
- Anyone who’s been burned at audit — real-time reporting is the structural fix
What it doesn’t change
Coverage, class codes, and your experience mod all work the same — pay-as-you-go changes when and how you pay, not what you’re protected against. Rates come from the same carriers; you should still compare them.
Frequently asked questions
Do I need a specific payroll provider?
Pay-as-you-go integrates with most major payroll services, and manual reporting options exist. Tell us how you run payroll and we’ll match a program that fits.
Is pay-as-you-go more expensive?
The rates are the same — what changes is the payment structure. For most businesses it’s cash-flow positive versus a deposit-plus-audit cycle.
Can I switch mid-policy?
Typically the switch happens at renewal, though options vary. Talk to us about timing and we’ll map it out.
See if pay-as-you-go fits your business — get your quote here or read more on our pay-as-you-go page.