Streamline your workers’ compensation premium payments

Integrate workers’ comp premium payments with your payroll payments.

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Advantages of streamlined workers' comp premium payments

Improved cash flow

Streamlining your premium payments allows for more efficient cash flow management. Through ADP’s Pay-by-Pay, you can potentially eliminate the need for an upfront premium deposit1, freeing up resources for other business needs.

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Greater accuracy

You only pay for what you owe3. Premium payments are calculated based on real-time payroll data, thanks to a seamless connection between your workers' comp policy and ADP payroll. This ensures that you are always paying the correct amount.

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An overall better experience

With Pay-by-Pay, you can minimize the risk of late payments, policy cancellations, and overpayment of premiums, eliminating the need to write manual checks. Other benefits include streamlined audits2 through easy access to related documentation and reports in just a few clicks. Additionally, you’ll have 24/7 visibility of policy details, including policy term, class codes, and premiums.

Get ADP Pay-by-pay for workers’ comp

One simple, pay-as-you-go solution

Managing workers’ comp premium payments doesn’t have to be complicated, even if you have a fluctuating workforce. When you sign up for ADP’s Pay-by-Pay premium payment program, we can help you to:

Improve cash flow

Manage premium payments efficiently and possibly eliminate your upfront premium deposit*.

Improve accuracy

Only pay for what you owe — payments are based on real-time data each payroll cycle.

Simplify audits

Reduce the risk of over or underpayment of your workers' compensation premiums.

Save time and streamline your business

When you integrate ADP payroll with a workers’ compensation policy brokered by our affiliate, Automatic Data Processing Insurance Agency (ADPIA®), your premium payments are automatically forwarded directly to the carrier. Skip the administrative hassle, so you can spend more time focused on your business.

  • Reduce your risk of late payments and policy cancellations, and overpayment of premiums
  • Eliminate the need to write manual checks

of ADP clients spent less time on administrative tasks related to managing their workers’ compensation premium payments by using our Pay-by-Pay premium payment program.

No more upfront deposits*

Did you know traditional workers’ compensation programs can require 25-100% of estimated premiums as an upfront binder? With Pay-by-Pay, you may be able to eliminate the upfront deposit and spread your payments across your payroll life-cycle.

  • Premiums are based on your actual real-time payroll information and carrier rates
  • Reduce the chance of unexpected “catch-up” payments or end-of-year audit surprises

Simplify audits

Access convenient reports to track and manage premiums paid every time you process payroll.

  • Detailed information at the employee, state, and class-code level
  • Carriers may accept the Pay-by-Pay report during the year-end audit; and approve without your involvement**
  • Get support from a team of licensed agents to answer your questions about workers’ comp, audits, or claims

of ADP clients said using our Pay-by-Pay premium payment program made preparing for their workers’ comp audit easier.

How does your current solution stack up?
Take a look and compare.

ADP’s Pay-by-Pay Premium Payment Program Current Pay-by-Pay
Eliminates the upfront premium deposit1  
Spreads workers’ compensation premium payments across your annual payroll cycle  
Adjusts premium payments based on actual payroll data and carrier rates to minimize your over or underpayments at year-end audit  
Automatically forwards your premium payments to your carrier, reducing your risk of late payments and the need to write manual checks  
Provides detailed premium payment information at the employee, state, and class-code level to help minimize audit impact  
Carriers may accept the Pay-by-Pay report during the year-end audit; and approve without your involvement2  
Create, update, renew, and retrieve Certificates of Insurance in real-time3  

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How ADP works with others like you

With ADPIA and ADP’s Pay-By-Pay, I have the confidence that our workers’ compensation reporting is accurate, removing the need to devote any additional time and allowing us to focus our energies on continuing to grow the business.

Richard Butler Chief Operating Officer, Etairos Health

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Frequently asked questions about Pay-by-Pay

How does ADP's Pay-by-Pay program work?

Each time a client runs payroll with ADP, the premiums for their workers' compensation policy are calculated and forwarded directly to the insurance carrier.

What are the benefits of ADP's Pay-by-Pay?

ADP's Pay-by-Pay automates the payment of insurance premiums, offering clients:

  • Improved cash flow — since your payments are spread over your payroll cycle
  • Greater convenience with premium payments made directly to your carrier. This helps to reduce administrative burdens by eliminating the time and guesswork involved in calculating premium amounts.
  • Accurate accounting with premiums based on your actual payroll data
What are the requirements to participate in ADP's Pay-by-Pay program?

Clients who meet the following criteria are eligible:

  • Are using ADP Payroll and subscribe to ADP Payroll Tax Filing
  • Have consistent payroll processing
  • Hold an insurance policy with an ADPIA participating carrier partner in which ADPIA is the agent of record (excluding Ohio, please see below).
How can I determine the premiums I've paid on my policy?

As an ADP Pay-by-Pay client, you will receive the Pay-by-Pay Premium Report that helps you track your policy premiums. This report is available every time you process payroll and provides a breakdown of premiums paid by employee, class code, and check date, and also gives you a year to date total. Click here for a sample Pay-by-Pay report.

How can I access ADP's Pay-by-Pay Premium Payment Reports?

Since Pay-by-Pay reports contain highly sensitive information such as employee payroll amounts, we offer three secure ways to obtain them:

  • Via secure email each time you process payroll
  • Via your payroll platform online processing system, available 24 hours a day / 7 days a week to our RUN Powered by ADP® clients
  • By contacting our customer service department at 1-800-524-7024, option 3
My business is in Ohio. Can I participate in ADP's Pay-by-Pay program?

Yes. Ohio-based businesses must obtained workers' compensation coverage through the Ohio Bureau of Workers' Compensation (BWC) — but we do offer ADP's Pay-by-Pay service to Ohio clients. This benefit enables the insured to have their premiums calculated on actual payroll runs. ADPIA then remits those premium payments to the Ohio BWC.

How am I billed for workers' compensation insurance if I'm not using ADP's Pay-by-Pay?

Direct billing is an option for clients that prefer to receive a bill for their workers' compensation premiums that come directly from their insurance carrier.

How are premiums calculated?
  • Carrier rate x Payroll (Per $100) = Premium
  • This calculation results in your base rate and can be found on the declaration page of your policy.
Why is there a difference between the rate listed on my policy and the rate listed on my Pay-by-Pay report?

Additional factors that can impact your base rate include:

  • Experience modification
  • Carrier determined premium discount
  • Expense constant
  • State assessments and taxes
  • Terrorism charge

The above items are factored into your base rate to calculate your net rate. Net rates are used in the collection of premiums via ADP's Pay-by-Pay product.

What are the three methods used for funding workers compensation?
  • Private Insurance Policies: This is the most common approach. Businesses with employees purchase coverage from private insurance companies, which simplifies the process of covering medical expenses and lost wages for injured employees. This method is particularly appealing for small to mid-sized businesses, as it transfers the financial risk of workplace injuries to the insurer.
  • Self-Insurance (through insurance pools): Larger companies or those with lower risk may opt to self-insure. This means that they take on the financial responsibility for workers' comp claims themselves. Employers who choose this route must set aside funds to cover potential claims and ensure compliance with state regulations on reserves and reporting.
  • State Insurance Funds: In some states, like Ohio and North Dakota, employers can purchase workers' compensation coverage through state-run insurance programs. These funds often provide competitive rates and tailored coverage options, making them an attractive choice for many businesses.

Each method has its advantages, and the choice often depends on the size of the business and its specific needs.

1 While premium deposits may be eliminated with most carriers, mandatory state assessment fees may be required in some states.

2 While Pay-by-Pay may reduce the administrative burden of the annual audit, the carrier reserves the right to perform a more in-depth audit, as outlined in your policy documents.

3 Must be an ADP Payroll client using RUN Powered by ADP® or ADP’s Workforce Now® and have a workers’ compensation policy brokered by ADPIA. ADP's Pay-by-Pay Premium Payment Program is a payroll enhancement feature of ADP's payroll processing services. Clients must be using ADP's tax filing service to take advantage of Pay-by-Pay. Pay-by-Pay is not available with all carriers. Talk to a licensed ADPIA agent for more details.