Calculate the workers compensation premium for a SC roofing contractor with a $180,000 annual payroll and a rate of $24.50 per $100 of payroll:
Correct Answer
D) $44,100
Premium = ($180,000 ÷ $100) × $24.50 = 1,800 × $24.50 = $44,100
Why This Is the Correct Answer
The standard workers compensation premium formula is: (Annual Payroll ÷ 100) × Rate per $100. Here: ($180,000 ÷ 100) × $24.50 = 1,800 × $24.50 = $44,100. The roofing trade carries one of the highest WC rates because of the elevated fall-injury risk, which is why the $24.50 rate per $100 is realistic for this trade class.
Why the Other Options Are Wrong
Option A: $46,100
$46,100 results from an arithmetic error — perhaps multiplying 1,800 × $25.61 or adding an incorrect surcharge. There is no modifier in this problem that would produce this figure.
Option B: $42,100
$42,100 is below the correct answer and likely results from using a rate of approximately $23.39 per $100, or from a subtraction error in the multiplication step.
Option C: $48,100
$48,100 is above the correct answer and likely results from rounding up the payroll units or misapplying the rate (e.g., using $26.72 per $100).
Memory Technique
Think of the payroll as 'units of $100': $180,000 payroll = 1,800 units. Then multiply units × rate: 1,800 × $24.50 = $44,100. Two steps: convert, then multiply.
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