Some insurance companies base their insurance premium calculations on your
employees' base wages. This means that they don't charge you extra when
an employee works overtime.
Let's say your employee Dan Miller earns $20 an hour straight time and
$30 an hour overtime (or time-and-a-half). Say the workers compensation
insurance rate for Dan's workers compensation code is 5.50 per $100 (or
0.055). And let's say that last week, Dan worked 40 hours straight time and
10 hours overtime. His gross wages, then, were (40 x $20) + (10 x $30) = $800 +
$300 = $1100.
If your insurance company does not exclude
premiums from its calculations, then you would owe 0.055 x $1100 in workers
compensation insurance, or $60.50.
If your insurance company does exclude overtime premiums, then you
owe less. Your insurance company charges you as if Dan had worked all 50 hours
at straight time. So you would owe only $55.00, or 0.055 x $1000, where $1000 =
(40 + 10) x $20 (the straight-time wage).
If you are not sure what your insurance company's policy is, either
check with them or your accountant.
Excluding overtime premiums from workers
Workers Compensation overview