What Counts as Payroll?
Workers’ Comp Payroll Definition
For workers' compensation purposes, payroll or remuneration means money or substitutes for money. Your premium calculations include the following as remuneration:
- Wages or salaries including retroactive wages or salaries.
- Total cash received by employees for commissions and draws against commissions.
- Bonuses including stock bonus plans.
- Extra pay for overtime work-see next section for exceptions.
- Pay for holidays, vacations, or periods of sickness.
- Payment by an employer of amounts otherwise required by law to be paid by employees to statutory insurance or pension plans, such as the Federal Social Security Act.
- Payment to employees on any basis other than time worked, such as piecework, profit sharing, or incentive plans.
- Payment or allowance for hand tools or power tools used by hand provided by employees either directly or through a third party and used in their work or operations for the insured.
- The rental value of an apartment or a house provided for an employee based on comparable accommodations.
- The value of lodging, other than an apartment or a house, received by employees as part of their pay, to the extent shown in the insured's records.
- The value of meals received by employees as part of their pay to the extent shown in the insured's records.
- The value of store certificates, merchandise, credits or any other substitutes used for money received by employees as part of their pay (refer to exclusions below for certain fringe benefits [substitutes for money] not considered to be remuneration).
- Payments for salary reduction, retirement or cafeteria plans (IRC 125) which are made through deductions from the employee's gross pay.
- Davis-Bacon wages paid to employees or placed by an employer into third-party pension trusts.
- Annuity plans.
- Expense reimbursements to employees to the extent that an employer's records do not substantiate that the expense was incurred as a valid business expense.
- Payment for filming of commercial excluding subsequent residuals which are earned by the commercial's participant(s) each time the commercial appears in print or is broadcast.
Remuneration EXCLUDES the following:
- Tips and other gratuities received by employees.
- Payment by an employer to group insurance or group pensions plans for employees.
- The value of special reward for individual invention or discovery.
- Dismissal or severance payments except for time worked or for accrued vacation.
- Payments for active military duty.
- Employee discounts on goods purchased from the employee's employer.
- Expense reimbursements to employees to the extent that an employer's records substantiate that the expense was incurred as a valid business expense.
- Supper money for late work.
- Work uniform allowance.
- Sick pay paid to an employee by a third party such as an insured's group insurance carrier that is paying disability income benefits to a disabled employee.
- Employer provided perquisites ("perks") such as:
- An automobile.
- An airplane flight.
- An incentive vacation (e.g., contest winner).
- A discount on property or services.
- Club memberships.
- Tickets to entertainment events.
- Employer contributions to salary reduction, employee savings plans, retirement, or cafeteria plans (IRC 125) -- contributions made by the employer, at the employer's expense, that are determined by the amount contributed by the employee.