A Tennessee residential contractor has 12 employees working on various job sites. The annual workers compensation premium is calculated at $4.50 per $100 of payroll for the classification. If the total annual payroll is $480,000, what is the workers compensation premium?
Correct Answer
A) $21,600
Premium = ($480,000 ÷ $100) × $4.50 = 4,800 × $4.50 = $21,600
Why This Is the Correct Answer
Premium = ($480,000 ÷ $100) × $4.50 = 4,800 × $4.50 = $21,600
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A Tennessee contractor's workers compensation policy has a $500 deductible per claim. An employee injury results in medical costs of $15,000 and lost wages of $8,000. How much will the contractor pay out of pocket?
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