Washington State Workers’ Comp Rates: 2026 Changes and Premiums

Washington State workers’ comp rates are set once a year by the Department of Labor and Industries and charged as an hourly rate for each employee rather than as a percentage of payroll. For 2026, L&I adopted an average rate increase of 4.9 percent, adding roughly $1.37 per week per full-time worker to the combined employer and employee cost.¹ What you actually pay depends on your industry risk classification, your company’s claims history, and how the total splits across the four funds that make up every L&I premium.

Why Washington Works Differently

Washington runs a monopolistic workers’ compensation fund. You cannot buy this coverage from a private carrier. Every employer with workers in the state either pays into L&I or qualifies as a certified self-insured employer.² L&I holds the authority under state law to classify occupations by hazard and set base rates high enough to keep the fund solvent.³

Because premiums are billed per hour worked, not as a percentage of payroll, rising wages don’t automatically pull in more revenue. When wages go up, L&I’s wage-replacement costs go up, but nothing comes into the fund unless the hourly rate itself is raised.⁴ That is why Washington employers see explicit rate adjustments announced each December for the year ahead.⁵

2026 Rate Changes

The 4.9 percent average base-rate increase for 2026 works out to roughly $71 per year per full-time employee before any retrospective rating refunds. Out of Washington’s 327 risk classifications, 293 will see higher base rates. L&I has said even this increase does not fully cover projected 2026 claim costs, and the agency plans to draw on the workers’ compensation contingency reserve to close the gap.¹

The Four Funds Behind Your Premium

Every L&I-insured business pays into four separate funds, each with its own hourly base rate. The split matters because employer and employee shares differ by fund.⁶

The Accident Fund pays wage replacement, permanent disability awards, pensions, and death benefits. The employer covers this portion entirely.
The Medical Aid Fund pays for medical treatment and vocational rehabilitation counselor fees. Employer and employee split this cost equally.
The Stay at Work Fund reimburses employers who bring injured workers back on light duty. Also split equally.
The Supplemental Pension Fund pays cost-of-living adjustments on long-term wage replacement and pension benefits. Split equally, and the same rate applies to every risk class.

The Accident Fund is usually the largest single piece for high-hazard industries, while the Supplemental Pension Fund is a flat amount regardless of what your workers do.⁷ Because three of the four funds involve employee contributions, you must deduct the employee share from each worker’s paycheck and remit the full combined amount to L&I quarterly.

What Sets Your Specific Rate

Two variables turn the statewide base rates into the personalized rate on your account: your risk classification and your experience factor.

Risk Classification

L&I assigns every employer one or more risk classifications based on the work performed. Washington maintains its own system with more than 300 risk classes, governed by WAC 296-17.⁸ If your employees do meaningfully different kinds of work, you may carry multiple classes on one account. A landscaping company with office staff would report administrative hours under one class and field crew hours under a much higher-rated class.

Each risk class has separate base rates for all four funds, and L&I actuaries recalculate them each year using five years of claim costs and hours worked.⁷ Employers in industries with frequent or severe injuries pay dramatically more per hour than employers in low-hazard fields.

Experience Factor

L&I applies an experience factor to your base rates each year to reflect how your claim costs compare to other businesses in your risk class.⁹ The calculation uses a three-year window. Losses below the class average produce a factor under 1.0 and a discount; losses above average push the factor over 1.0 and raise your rate.¹⁰

This is the single biggest lever most employers have. A company with an experience factor of 0.80 pays 20 percent less than another company in the same risk class sitting at 1.0.

Sample 2026 Rates by Industry

The range of rates across Washington’s risk classes is large. A few 2026 examples show the total hourly cost (employer and employee combined) at an experience factor of 1.0:¹¹

Office or clerical work (Class 4904): about $0.22 per hour worked
Restaurants (Class 3403): about $0.53 per hour worked
General construction (Class 5003): about $6.39 per hour worked
Heavy construction such as bridges and highways (Class 5001): about $19.64 per hour worked

An office-heavy business with 10 full-time employees might owe a few hundred dollars per quarter. A heavy construction firm with the same headcount could owe tens of thousands. Your annual rate notice, mailed each December, lists the exact rates for every risk class on your account.⁵

How to Calculate Your Quarterly Premium

Your hourly premium rate combines your experience factor with the four base rates. Multiply your experience factor by the sum of the Accident Fund, Medical Aid Fund, and Stay at Work base rates, then add the flat Supplemental Pension Fund rate.⁵

Suppose your experience factor is 0.9789 and your risk class has these base rates: Accident Fund $0.0221, Medical Aid Fund $0.0160, Stay at Work $0.0003, and Supplemental Pension Fund $0.1120. Your hourly rate would be:

0.9789 × ($0.0221 + $0.0160 + $0.0003) + $0.1120 = $0.1496 per hour worked

To get your quarterly bill, multiply that rate by the total hours every employee in that class worked during the quarter. With multiple risk classes, run the calculation for each one and add the results. The employee share (half of the Medical Aid, Stay at Work, and Supplemental Pension portions) comes out of workers’ paychecks; the rest is on the employer.

Accurate hour tracking is essential. L&I’s system runs on hours, not payroll dollars, so sloppy timekeeping directly produces overpayment or underpayment. Washington law requires employers to keep payroll records, including actual daily and weekly hours worked, for at least three years.¹²

Filing Deadlines and Late Penalties

Quarterly reports and payments are due four times a year, by the last day of the month after each quarter closes:¹³

Q1 (January–March): due April 30
Q2 (April–June): due July 31
Q3 (July–September): due October 31
Q4 (October–December): due January 31

You can file through L&I’s online QuickFile system or through Claim and Account Center, and pay by eCheck, credit or debit card, or a paper check with a payment voucher.¹⁴

Miss those deadlines and the costs escalate quickly. L&I imposes a penalty on the premium due plus interest that compounds monthly:¹⁵

One month late: 5% penalty plus 1% interest
Two months late: 10% penalty plus 2% interest
Three months late: 20% penalty plus 3% interest
Four or more months late: the 20% penalty holds, and another 1% interest accrues each month until paid

No penalty will be less than $10. A business three months behind effectively owes 23 percent more than the original amount due.

Ways to Lower Your Premium

Since you cannot shop for a different carrier, reducing your rate means working within the L&I system.

Improve Your Experience Factor

Every dollar in claim costs during your three-year experience period pushes your factor higher. Safety programs, proper equipment use, and prompt injury response all feed into a lower factor over time. Businesses with zero compensable claims during the experience period get the steepest discounts.¹⁰

Join a Retrospective Rating Group

Retrospective rating (retro) lets employers earn premium refunds if their group’s actual claim costs come in below expectations. Any employer with an L&I account in good standing can participate, either through a group sponsored by an industry association or as an individual business.¹⁶ A retro period runs 12 months starting any calendar quarter, and L&I evaluates performance about 9 months after the period ends, with two more evaluations roughly 12 months apart.

The tradeoff is real. If your group’s claims come in higher than projected, you can be assessed an additional amount up to a pre-selected cap.

Use the Stay-at-Work Program

Bring an injured worker back on light duty and you can claim partial reimbursement for wages up to $25,000 over 120 days worked and up to $5,000 for tools and equipment per claim. These reimbursements apply to claims with injury dates on or after January 1, 2025.¹⁷ Shorter claims also help your future experience factor.

A Word on Independent Contractors

One warning about the rate math above: it only works if the people whose hours you are reporting are actually the only people L&I considers your employees. A federal 1099 form does not decide the question. If L&I audits your account and reclassifies contractors as employees, you owe back premiums on all the hours they worked, plus penalties.¹⁸ Washington uses a Personal Labor Test followed by a six-part test (seven parts for construction), and a UBI number or contractor registration alone does not satisfy either. Document how each contractor meets the applicable test before you rely on that status.

1
Washington State Department of Labor & Industries. Final Rates
2
Washington State Department of Labor & Industries. Do I Need a Workers’ Comp Account?
3
Washington State Legislature. RCW 51.16.035 – Classification of Industries or Occupations
4
Washington State Department of Labor & Industries. Washington Workers’ Compensation Premium Rate Going Up an Average of 4.9% in 2024
5
Washington State Department of Labor & Industries. Calculating Premium Rates
6
Washington State Department of Labor & Industries. Unique Premium Rating Features in Washington
7
Washington State Department of Labor & Industries. Base Rates
8
Washington State Department of Labor & Industries. Risk Classes for Workers’ Compensation
9
Washington State Department of Labor & Industries. Experience Rating
10
Washington State Department of Labor & Industries. Calculations for Experience Factors
11
Washington State Department of Labor & Industries. 2026 Hourly Rates by Risk Classification Code and Fund
12
Washington State Department of Labor & Industries. Payroll and Personnel Records
13
Washington State Department of Labor & Industries. File Quarterly Reports
14
Washington State Department of Labor & Industries. How to File and Pay Your Workers’ Compensation
15
Washington State Department of Labor & Industries. Penalties and Interest for Filing Late
16
Washington State Department of Labor & Industries. About Retrospective Rating
17
Washington State Department of Labor & Industries. Stay at Work
18
Washington State Department of Labor & Industries. Independent Contractors