Glossary  /  Classification & payroll

Audit basis

Also called premium basis, payroll basis

The audit basis is the final payroll figure, by class code, that premium is calculated against once inclusions and exclusions have been applied.

Building it means starting from gross remuneration, removing allowable exclusions, applying any state caps on individual earnings, and assigning what remains to the correct classifications.

Every step depends on documentation. An exclusion that cannot be evidenced in the payroll records is an exclusion that does not get applied.

Related terms

  • RemunerationRemuneration is the workers' compensation term for all compensation that counts toward premium, which is broader than take-home pay and broader than what most businesses think of as payroll.
  • Overtime premium exclusionThe overtime premium exclusion removes the extra portion of overtime pay from the audit basis, so an employee paid time-and-a-half is rated on their base hourly rate rather than the premium rate.
  • Division of payrollDivision of payroll is the practice of splitting one employee's wages across multiple class codes when they genuinely perform work in more than one classification.

Back to the premium audit glossary