EMR Calculator

An experience modification rate (EMR) is a multiplier applied to your workers’ compensation premium that compares your actual claim losses to the losses expected for businesses with your payroll in the same class codes. An EMR of 1.00 is average, an EMR of 0.85 reduces premium by 15 percent, and an EMR of 1.20 increases premium by 20 percent.

Under the NCCI formula, EMR equals actual primary losses plus weighted actual excess losses plus the unweighted share of expected excess losses plus ballast, divided by expected losses plus ballast. Written out, EMR = (Ap + W x Ae + (1 − W) x Ee + B) / (E + B). Primary losses are the first dollars of each claim up to the split point and count in full, while excess losses above the split point are weighted by W.

An EMR below 1.00 is better than average and earns a premium credit. Many owners and general contractors use EMR to prequalify contractors and commonly look for an EMR at or below 1.00, with some setting stricter limits, so an EMR above 1.00 can cost you bids as well as premium.

Every claim’s primary portion, up to the split point, counts in full, while only a weighted fraction of the excess portion counts, especially for smaller employers with low W values. As a result, several small claims usually raise an EMR more than one large claim with the same total cost, which is why claim frequency matters so much.

In states that have adopted the Experience Rating Adjustment, medical-only claims are reduced by 70 percent before they are used in the EMR calculation. ERA rewards employers who report minor injuries promptly and manage them so they do not become lost time claims.

The experience period is generally the three most recent complete policy years, ending one year before the mod’s effective date. A claim therefore typically affects three consecutive annual mods, which is why the calculator shows the added premium over three years.

No. Several states have independent rating bureaus with their own experience rating plans, including California, New York, Pennsylvania, and New Jersey, and monopolistic state funds such as Ohio and Washington use their own programs. This calculator follows the NCCI formula; confirm the plan that applies to your policies with your agent.