Workers' Compensation

SOLVED

I am hoping someone can help me with updating the workers' compensation (5-3-2) as this is something I have not done before.  I am trying to figure out where the "liability" column numbers come from.  I have chatted with Sage and they tell me I need to ask my insurance agent.  I did and neither of us can figure where to get the numbers or calculations.  The person before me has the column completed with outdated figures and I need to update with the current insurance policy.  Can someone please give me an idea on how I arrive at those numbers that go in that column?  I appreciate any help I can get.  Thank you.

  • 0

    Hi Tracy. The rates for workers compensation liability insurance would come from your insurance provider - Sage does not have these rates and cannot provide them as they are related directly to your company. If the person you talked to at your insurance company does not know those rates, then either your company does not currently carry liability insurance (some states require this, but most do not), or you may need to speak to someone else at the insurance company who can help you. 

  • 0 in reply to ghollister

    I appreciate your quick response.  We do have liability insurance.  The problem is we do not know who to get to that magic number that goes into the liability column.  What is the calculation to get that liability number.  What number do you take from the liability insurance?  Then how do you arrive at the final number.  We have categories such as painting, masonry and carpentry in Iowa, Illinois and Wisconsin.  They all have their own numbers.

  • 0 in reply to Tracey Winsett

    Unfortunately, there is no calculation or method that we have to come up with that rate. It's simply a % (i.e 4.525) that is entered into that column for any particular comp code. We have no way to determine how the previous user came up with those numbers. You would need to do your best to match up those category rates with the appropriate comp code.

  • 0 in reply to Tracey Winsett
    SUGGESTED

    It is a magical number, that's for sure.  Typically Gl insur is based on sales not payroll.  But you typically have to provide estimated sales and estimated payroll so there is a relationship between the two.  So the prem is typically divided by sales to get sales %.  so for payroll it would be prem / estimated payroll. that is the % you put in Sage column.  But you should analyze a couple times a year to see if adjustments need to be made since estimates can be too high or too low.  when estimates are too low you will owe money

  • 0 in reply to ghollister
    SUGGESTED

    GL rates do not vary by WC code in CA, but I cannot speak for other states

  • 0 in reply to Char DeLange

    I will pass on to my insurance agent.  That is the best answer I have received so far!  I appreciate your help.

  • 0 in reply to Tracey Winsett

    Hi Tracey Winsett, if the above suggested answer helped, please do mark it as verified White check mark for the benefit of others in this forum :). Thank you!

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  • 0

    Some users have a general liability insurance policy with premiums based on payroll. You will usually pay your premium based on an estimate and use this feature in Sage to apply the cost of the premium paid from your prepaid insurance asset account throughout the year.

    To do this you will need your insurance agent to provide you the general liability insurance rates sheet from your insurance declarations. This sheet should show the GL classifications, codes numbers, and rates (along with other information).

    The rate is a combination of two rates, "Products / Completed Operations" and "All Other". Liability rates are generally listed for every $1,000 of payroll, but check your policy. So you would add these two rates together and divide by 10 to convert it to a percentage, which is what Sage will use. Enter this number into the LIABILITY column for each corresponding Workers' Compensation Code in Sage 5-3-2.

    Helpful Hint: Workers' Company and General Liability code numbers are different for the same scope of work they cover. To prevent confusion, enter the corresponding GL code# in the notes of each WC code in your list.

    SAMPLE

    CLASSIFICATION CODE# RATE-PCO RATE-AL RATE-COMBINED SAGE LIABILITY
    Carpentry 91342 8.6240 8.1490 16.7730 1.6773
    Drywall Install 92338 3.3830 4.4350 7.8180 0.7818
    Contractor Exec 91580 15.5490

    15.5490

    1.5549
  • +1 in reply to Neil Macernie
    verified answer

    That is exactly what I was looking for!  I want to thank you for reaching out with an explanation and example of how to complete the 5-3-2 calculation report.  As a new Sage user, your instructions are easy to follow and I can update calculations sheet without frustration.  I really appreciate your assistance.