Once registered, you will be charged annual or quarterly insurance premiums for your workplace disability coverage based on your assessable payroll and your firm's net rate.

Insurance premiums are collected from registered firms to cover the costs of work-related injuries, occupational diseases, and fatalities. These include health care, wage-loss, rehabilitation, administration, and all other related costs. As a registered firm, you are required to pay these premiums just as you would pay premiums for any other type of insurance.

To find out how much your coverage costs, visit worksafebc.com/insurance.

Calculating your premiums

Your premiums are calculated using three variables: the base premium rate for your classification unit, your experience rating adjustment, and your assessable payroll. These terms are explained below.

Classification units

Our classification system groups firms in similar industries with similar levels of risk, so we're able to charge you a fair rate that reflects the rate of injury and illness in your industry.

Firms in the same industry share the same classification unit and pay the same base premium rate for insurance. An industry's base premium rate reflects the risk of injury and historical claim costs. The higher the risk and relative claim costs, the higher the industry's base premium rate will be.

Classification units help ensure that the overall claims costs in B.C. are distributed fairly among the industries responsible for those costs - industries with higher injury costs pay higher premiums.

There are approximately 540 classification units; the following are three common ones for small businesses:

• 761035 - Restaurant or Other Dining Establishment • 721027 - House, Other Wood Frame Construction, or Renovation Work
• 741013 - General Retail (not elsewhere specified)

To determine the classification unit that best describes your firm, we consider several factors, including the following:

• Type of products or services you provide, or how you generate revenue
• Processes, technology, or materials you use
• Type of industry you compete in

Base premium rates

The base premium rate is the percentage of payroll that is charged for your industry, ensuring that employers pay the costs of injuries, diseases, and related prevention activities for their industry. Different classification units have different base premium rates. To ensure that base premium rates remain fair and equitable, we review the classification system every year and modify rates to reflect changes in industries and the economy.

Experience rating

Experience rating is the discount or surcharge that your firm earns each year.

The discount or surcharge ensures that the costs of compensation for people injured at work are distributed fairly. This is how we determine it:

• We determine your claim costs for the past three years.
• We take into account the size of your firm, based on your payroll.
• We compare your claim costs per dollar of payroll to the industry average.

If your claims are lower than those of competitors of the same size, you can earn discounts on your base premium rates - up to 50 percent over time.

If your claims are higher than those of competitors of the same size, you may face surcharges of up to 100 percent over time. You can estimate your experience rating using the experience rating calculator on worksafebc.com or by calling the Employer Service Centre (at 604.244.6181 in the Lower Mainland or 1.888.922.2768 toll-free in Canada). Also see "How can I reduce my premiums?" on pages 15-16.

Assessable payroll

Your assessable payroll is the total amount of wages you pay to your workers, including gross wages, salaries, commissions, bonuses, holiday pay, and other remuneration before deductions. It excludes non-cash taxable benefits. Most small businesses calculate and submit this information using the Employer Payroll and Contract Labour Report (form 1810). Your assessable payroll may also include payments you made to contractors, or shareholder earnings, such as dividends paid to an active shareholder in a closely held private corporation.

Sample calculation of an annual premium

The following formula determines how much you pay:

[Industry base premium ± Experience rating] × Assessable payroll = Premium

For example, the 2019 base premium rate for a restaurant (classification unit 761035) is 0.82% of assessable payroll. This means that a firm in this classification unit with an annual assessable payroll of $200,000 and an experience rating discount of 10% will pay an annual premium of $1,476 in 2019.

[0.82% - (0.82% × 10%)] × $200,000 = $1,476 premium