What is Pay As You Go Workers Compensation?
Pay As you Go (PAYG) workers’ compensation allows you to make premium payments based on runtime data i-e whenever you run payroll. Your workers’ compensation insurance liability is spread out throughout the year.
With traditional workers’ compensation plans, you need to pay large, fixed, and lump-sum amounts to cover the estimated cost of your liability. PAYG workers’ compensation is flexible as it enables you to pay at the time of each payroll run only. This means that over the year, if you add or lose employees, your premium liability will change accordingly.
Some insurance policy providers offer PAYG workers’ Compensation as an alternative to traditional workers’ compensation.
When it comes to trucking, PAYG workers’ compensation plans are ideal due to a number of benefits they offer. Let’s take a look below:
Pay accurate premium amounts
Traditional truckers’ compensation insurance premiums are based on estimates. You have to pay the premium upfront based on the estimation of your payroll, for the whole year. Of course, the insurance providers make adjustments at the end of the year. They refund or charge you more as per your data.
But, with PAYG workers’ compensation insurance for truckers, you pay the exact amount you owe based on your payroll. This prevents you from over- or under-estimating.
There are certain times in a year, when the trucking business is sluggish. You can’t keep paying for the trucks which have been sitting idle during slow months. This flexibility makes it ideal for the trucking business to opt for PAYG insurance plan.
Because of accurate premium payments, the audit remains simple and clean.
Benefits of Pay As You Go Workers Compensation
For many business owners, especially trucking business owners, PAYG workers’ compensation offers more benefits as compared to traditional lump-sum payments. Here are some of the benefits:
No Lumpsum Payments
Making lump-sum payments are burdensome for trucking business budget, and they affect cash flow management. Various other factors, such as vehicles, number of employees, locality, etc. can make this annual payment surge. PAYG workers’ compensations are easy to manage because they don’t make a significant cut on your finances with one strike. Instead, these are incremental payments that you can make whenever you run payroll.
Automate workers’ compensation payments
With so many things on your plate, remembering to make payments can slip your mind.
With PAYG workers’ compensation, your insurance provider automatically collects your premiums with each payroll.
You can enjoy a more simplified life as an employer with PAYG Workers’ Compensation Insurance.