Jon Nelson Insurance
Contractor Law & Regulation
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
- 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 they are provided in lieu of wages)
- Tips
- Premium portion of overtime pay (the increase above the regular rate of pay)
- Severance pay (except for accrued vacation, sick pay, commissions and bonuses)
- Employer contributions to qualified insurance, stock or retirement plans
- Stock options
- 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
- Residual payments for commercials
- A uniform allowance
Note:
Payroll for workers’ compensation insurance purposes is not necessarily the same as the Internal Revenue Service definition of payroll.
This information sourced from wcirb.com
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