Alabama Workers' Compensation Cost Calculator
Key facts: workers' comp in Alabama
- Who must be covered
- Mandatory starting at 5 employeesOfficial agency: Workforce Alabama
- Average rate
- $1.11 per $100 of payrollRank #24 of 51 (#1 = most expensive), above the $1.09 national median
- Rating organization
- NCCINational Council on Compensation Insurance · Private insurers
- Verified from official records
- October 3, 2026Rates: Oregon DCBS study, June 2025
Alabama requires workers' comp once a business has five or more employees, counting part-time staff, corporate officers and LLC members. Builders of new single-family homes need it below that. Employers insure through an approved commercial carrier, a group self-insurance fund or, if they qualify, individual self-insurance.
Rates in effect March 1, 2023 · Oregon Department of Consumer and Business Services, 2024 study (June 2025) · Nothing you enter leaves your browser
2024 study rate for all industries in Alabama. Edit it if your policy shows a different rate.
For the class you're pricing. Insurers rate each class code's payroll separately.
Printed on your experience rating worksheet or renewal. New or small employers that don't qualify for experience rating are rated at 1.00.
Estimated premium
$11,100
per year at an EMR of 1.00
At an average mod
$11,100
per year at an EMR of 1.00
Your EMR's impact
$0
no adjustment
Effective cost: $1.11 per $100 of payroll.
At an EMR of 1.00, your claims history neither raises nor lowers this premium.
Every claim from now on counts toward your next three renewals. IncidentLog makes the first step — a complete, same-day incident report — take about 90 seconds from a job-site QR code.
Create a free accountEstimate before schedule credits or debits, premium discounts, expense constants, state assessments and minimum premiums — your insurer's quote will differ.
Who must carry workers' comp in Alabama?
Mandatory starting at 5 employees
Part-time employees, corporate officers and LLC members count. Businesses that build, or assist on-site in building, new single-family detached homes need coverage even with fewer than five employees.
Official agency
Alabama Department of Workforce, Workers' Compensation Division (Workforce Alabama)
Market: Private insurers
Alabama workers' comp rates by business type
Rate per $100 of payroll for common class codes in Alabama, against the median of the 51 jurisdictions in the study.
| Business type (NCCI code) | Alabama | U.S. median | Difference |
|---|---|---|---|
| Office and clerical staff (8810) | $0.13 | $0.11 | +18% |
| Retail store (8017) | $1.49 | $1.20 | +24% |
| Restaurant (full service) (9082) | $1.41 | $1.09 | +29% |
| Restaurant (fast food) (9083) | $1.23 | $1.09 | +13% |
| Hotel (all other employees) (9052) | $1.79 | $1.79 | 0% |
| Assisted living / retirement center (care staff) (8824) | $1.83 | $2.03 | −10% |
| Hospital (professional staff) (8833) | $1.55 | $0.82 | +89% |
| Electrical contractor (5190) | $2.93 | $2.37 | +24% |
| Plumbing contractor (5183) | $2.34 | $2.70 | −13% |
| Residential carpentry (up to 3 stories) (5645) | $11.03 | $8.71 | +27% |
| Roofing (5551) | $10.71 | $9.64 | +11% |
| Trucking (7219) | $6.21 | $5.72 | +9% |
Alabama uses NCCI class codes. Your insurer applies the rate for your own classes, then your EMR.
What a bad EMR costs in Alabama
Take $500,000 of payroll at Alabama's $1.11 index rate: $5,550 a year at an average mod of 1.00.
- EMR 0.85
- $4,718/yr
- EMR 1.25
- $6,938/yr
- Difference
- +$2,220/yr
A claim year usually stays in the mod for three renewals, so the gap adds up to about $6,660. The mod is built from claims, and the cheapest claim is the injury caught early.
IncidentLog lets crews report an injury or near miss from a job-site QR code in about 90 seconds, so you hear about it the same shift and see patterns on your OSHA 300 log before they become claims.
Create a free accountAlabama workers' comp FAQ
Is workers' comp insurance mandatory in Alabama?
Yes, once a business has 5 employees or more. Part-time employees, corporate officers and LLC members count. Businesses that build, or assist on-site in building, new single-family detached homes need coverage even with fewer than five employees. Source: Alabama Department of Workforce, Workers' Compensation Division.
How are workers' comp rates set in Alabama?
Employers buy coverage from private insurance companies. The Oregon DCBS study lists NCCI (the National Council on Compensation Insurance) as Alabama's rating organization. Your own premium then depends on your class codes, your payroll and your experience modification rate (EMR).
What is the average workers' comp rate in Alabama?
The Oregon Department of Consumer and Business Services's 2024 study puts Alabama's all-industry index rate at $1.11 per $100 of payroll for rates in effect on March 1, 2023, 101% of the study's national median of $1.09. That ranks Alabama #24 of 51 jurisdictions, where #1 is the most expensive (#20 in the 2022 study). Your own rate depends on your class codes.
Sources
Official texts behind this page (5 quotes)
“Any business that has five or more employees, other than contractors, is required by law to have workers’ compensation coverage. The term “employee” includes all full or part-time employees, officers of a corporation or members of an LLC.”
How many employees must you have before coverage is mandatory? — Workforce Alabama (opens in a new tab) · checked October 3, 2026
“If you regularly employ fewer than five employees—full-time or part-time, including corporate officers—you are generally not required to carry workers’ compensation insurance under Alabama law. The exception is businesses involved in constructing or assisting on-site with new single-family, detached residential homes, which are required to maintain coverage.”
Insurance compliance — Workforce Alabama (opens in a new tab) · checked October 3, 2026
“Purchase insurance from an approved commercial workers’ compensation carrier. Provide coverage through a group self-insurance fund. Individually self-insure, if qualified.”
Insurance compliance — Workforce Alabama (opens in a new tab) · checked October 3, 2026
“Should you have any questions, contact the Workers’ Compensation division at 1-800-528-5166 or 334-956-4044.”
Insurance compliance — Workforce Alabama (opens in a new tab) · checked October 3, 2026
“Alabama Department of Workforce 50 North Ripley Street Montgomery, Alabama 36130”
How many employees must you have before coverage is mandatory? — Workforce Alabama (opens in a new tab) · checked October 3, 2026
An estimate for planning, not a quote, legal or insurance advice. IncidentLog is not an insurer or broker. Median rate across all industries: $1.09 per $100.