Know which payroll is included for California Workers Compensation premiums.

Workers’ compensation premium is assessed on gross wages and other compensation as defined by law. The table below identifies whether or not a specific form of compensation is considered as payroll for premium calculation.

Included as Payroll Not Included as Payroll
Sick, vacation, and holiday pay Tips
Bonuses and commissions Reward for discovery or invention
Automobile allowances Auto value; auto expense reimbursement
Regular overtime pay “Overtime Excess” pay*
Shift differential pay Severance pay
Idle time or standby/on-call pay Health and welfare paid by employer
Meals and lodging in lieu of wages Meals and lodging expenses
Certain pension/retirement plans: Employee’s voluntary contributions to pension/retirement plan, made through regular payroll deductions. Certain pension/retirement/cafeteria plans: Employer contributions to pension/retirement plan, and salary reductions to fund the welfare or fringe benefit portion of a Section 125 cafeteria plan.

*Overtime Excess (OTX): Total overtime compensation paid over and above the regular rate of pay, including increased pay for weekends, holidays, or hours worked beyond the standard number for the day or week.


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