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Annual premium audits

Why premium audits are required each year and how to prepare

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What are premium audits?

All policyholders complete premium audits each year, even those with no employees. Workers’ comp premiums are based on payroll amounts. At the beginning of your policy period, we calculate premium based on what you estimate your payroll will be. Once your policy period has ended, we make sure the amount charged was fair. During the audit, we look at your actual payroll amounts. You may receive a return or an additional charge as a result.

What to expect during the audit

  • Watch for a letter and/or email with instructions
  • Gather your payroll information and supporting documents
  • Submit payroll information online, by email or in person
  • Wait for an SFM auditor to review your information and determine your final premium amount
  • Receive a statement of audit by mail or email providing your final premium amount
  • Receive a bill, premium deduction or check if the audit results in a premium adjustment

How to prepare for your audit

  • Review the supporting documents you need to submit
  • Gather and save certificates of insurance for any subcontractors you hired during your policy period
  • Watch for letters and emails from SFM notifying you of your upcoming audit after your policy period ends

For more details, review our frequently asked questions.

Online premium audits

Complete your audit online

Did you receive a letter to complete your premium audit online? Log in to complete it through MyPayroll.

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Frequently asked questions

Your workers’ compensation premium is based on your estimated payroll, but payroll can change due to changes in workforce size, employees working overtime or operations expanding. For that reason, at the end of your policy period, we audit the last year and adjust your premium to reflect any changes. Policyholders with no employees are still required to complete an audit to confirm and update details such as their business operations, current ownership, and if any subcontractors were paid during the policy period.

Yes. You need to provide records confirming that you are still a single member owner with no employees. You will need to complete the online or paper premium audit and provide your business tax documentation. SFM also needs to collect information on any subcontractors you paid during the policy period.

Your user ID and password can be found on the letter and/or email you received from your SFM auditor. If you lost your user ID and password, call SFM at 800-937-1181 to obtain your credentials.

When it’s time for your premium audit, we’ll need:

  • A list of all subcontractors and/or 1099 workers that includes job descriptions and individual gross wages for the policy period
  • Copies of the 1099 Forms and 1096 Forms
  • Certificates of general liability and/or workers’ compensation coverage for each subcontractor

A vendor is someone who provides goods or services to you that are not part of the goods or services that you provide to your customers. For example, if an accounting firm hires a plumber to fix its water heater, the plumber is a vendor. If the accounting firm hires an independent accountant to help prepare taxes during its busy season, the accountant is a subcontractor.

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