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mi-businessMichigan Business Managementhard

A Michigan LLC contractor has 8 employees with a total annual payroll of $320,000. If the workers compensation rate is 6.2% and the experience modification factor is 0.85, what is the annual premium?

Correct Answer

B) $16,864

Premium = Payroll × Rate × Experience Mod = $320,000 × 6.2% × 0.85 = $16,864. The experience modification factor reduces the base premium.

Answer Options
A
$19,840
B
$16,864
C
$23,400
D
$20,400

Why This Is the Correct Answer

Premium = Payroll × Rate × Experience Mod = $320,000 × 6.2% × 0.85 = $16,864. The experience modification factor reduces the base premium.

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