What is Pay As You Go Workers’ Compensation?
January 30th, 2023 | 4 min. read

“Pay As You Go” is a buzzword in the small business community but doesn’t have much explanation on the web. You may have heard that it can make your annual workers’ compensation insurance audits go much smoother... and you would be correct!
What else is there to know? If you’re interested in learning more about standard and Pay As You Go (PAYG) workers’ compensation, you’ve come to the right place.
At CSI Accounting & Payroll, we’ve been working with small businesses for more than 50 years and provide PAYG, which isn't very common! That means we’ve answered these questions plenty of times:
- What is workers’ compensation insurance?
- What’s the difference between Pay As You Go and standard insurance?
- Does Pay As You Go cost more?
- How do I get a Pay As You Go quote?
What Is Workers’ Compensation?
Workers’ compensation is a type of insurance that businesses hold, especially if their industry has a high risk of injury. It protects employees if they get injured on the job, and it protects you from being sued.
Do you need it? Likely, yes. Most states, including Minnesota, require small businesses to carry workers' compensation insurance.
Each year, employers with workers’ compensation insurance policies go through an audit that reviews what you paid out in payroll for the policy year compared to the amount that you estimated to your insurance agent. Some payroll services, CSI included, will help you through these audits.
Pay As You Go vs. Standard Workers’ Comp
The differences between Pay As You Go (PAYG) workers’ compensation and standard workers’ compensation insurance are:
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Integration. PAYG integrates with your payroll software instead of having to manually update changes to your insurance. CSI doesn’t charge extra for this integration with our Apex and iSolved software either!
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Payments. PAYG makes automatic payments as payroll is run instead of having to make payments based on your estimate. PAYG means no surprises, whereas standard insurance can mean a large payment to correct a balance instead of consistently small, accurate payments!
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Audits. PAYG’s automatic payments based on payroll data means audits are simplified, rather than having complicated audits when your payments aren’t exact. Audits are less intrusive with PAYG.
Take a look at more comparisons according to our new partner, E-COMP:
Does Pay As You Go Cost More?
Pay As You Go workers’ insurance is arguably the better option here. So, what’s the catch? Will it cost an arm and a leg? Nope! Your workers’ compensation premium is the same whether you use PAYG or the standard insurance.
The only difference is that with standard insurance, you may be offered a discount for paying upfront. Since PAYG is automatically paid from your actual payroll data, you wouldn’t have that discount opportunity.
How Do I Get Pay As You Go Workers’ Comp?
Pay As You Go isn’t offered by every insurance company. However, CSI partners with a workers’ compensation insurance provider that specializes in PAYG. If you’re interested in a quote, simply contact your payroll specialist and let them know!
Please note: You must get workers’ compensation insurance through your state’s designated bureau if you live in North Dakota, Ohio, Puerto Rico, Washington, Wyoming, or the Virgin Islands. We cannot legally work with businesses in these locations.
Automate Your Payments & Make Audits Easy
Workers’ compensation isn’t as easy as it looks. Now that you know about what it is, the difference between Pay As You Go and standard insurance, their similar cost, and how to get a quote, why would you ever struggle through a workers’ compensation insurance audit again?
You may find a switch to Pay As You Go to be worth it. If you’re not a payroll client yet, that’s where we need to start! Schedule a call with us by clicking the button below:
Bret is the Chief Operating Officer at CSI Accounting & Payroll, a role he stepped into in 2024. He began his journey with CSI in 2007, starting in a marketing position and eventually becoming the Payroll Department Manager, where he played a key role in helping CSI's expansion and long-term success. His background in sales and management – along with a degree in Computer Networking and Certified Payroll Professional (CPP) title – continues to serve him well in a dynamic environment as he leads the way for our Minnesota office.