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Experience modification factor

Some insurance companies assign you an experience modification factor to use when you calculate your workers compensation premiums. This rate is based on your company's record of workers compensation claims. The better your track record, the lower your rate (or at least the fewer increases), which sometimes results in a discount on your workers compensation premiums. The more claims you have, the higher your rate, which sometimes results in a higher premium.

If you use the Workers Compensation feature in QuickBooks and your insurer has asked you to use an experience modification rate in your workers compensation calculations, QuickBooks needs this information to provide you with accurate and complete workers calculations and compensation reports. If you are not sure whether you are supposed to use one or not, contact your workers compensation insurance company.

You initially enter your experience modification factor as part of the Workers Compensation Setup wizard. If the rate for your experience modification factor changes later, you can update it from the Workers Comp Code list.

See also

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