What a workers' compensation audit checklist has to cover
A premium audit is a true-up. The policy was priced twelve months ago on estimated payroll, and the audit replaces every estimate with an actual figure. Everything an auditor asks for exists to answer one of three questions: what did you actually pay, who did you pay it to, and what work were they doing.
That means the document list is shorter than most people fear, but it has to be complete. A partial submission is the single biggest cause of an audit stretching from three days into three weeks, because each missing piece costs another round of email.
Which 941s your policy period actually covers
Form 941 is filed per calendar quarter. Your policy period almost never lines up with calendar quarters, so the number of filings you need depends on your specific dates.
A policy running July 1 to June 30 touches four quarters: Q3 and Q4 of the first year, Q1 and Q2 of the second. A policy running January 15 to January 14 touches five, because it starts partway through Q1 and ends partway through the following Q1. Assuming four and sending four is one of the most common reasons an audit stalls at the first document request.
The generator above works this out from your dates so you can request the right filings from your accountant the first time.
Why the payroll report format matters more than the numbers
Two payroll reports covering the same period can produce different premium. In most states the premium portion of overtime is excluded from the audit basis, so an employee earning $30 an hour and paid $45 for overtime is rated on the $30 base rate. That exclusion depends entirely on your report separating overtime from regular wages.
If the report shows one combined gross figure, there is nothing to subtract from and the full amount is rated. It is the same report with more columns switched on, and it is worth real money on any payroll with meaningful overtime. The same logic applies to splitting an employee across class codes: without time or job-cost records behind it, most states assign the whole payroll to the highest-rated code the person worked in.
The line that costs the most
Payments to subcontractors and 1099 contractors who cannot produce a certificate of insurance are usually added to your payroll and rated at your class code. Not a percentage of it — the full amount. A $60,000 subcontractor relationship with no certificate behind it can become five figures of additional premium.
The certificate has to cover the dates the person actually worked. If you want to see what a specific gap is worth before the audit does, the subcontractor exposure calculator puts a number on it.
Frequently asked questions
What documents do I need for a workers' compensation audit?
Almost every audit needs three things: your quarterly Form 941 filings covering the policy period, a payroll summary by employee with overtime shown in its own column, and a list of anyone you paid who wasn't on payroll along with their certificates of insurance. Depending on the business, an auditor may also ask for a general ledger, 1099-NEC forms, ownership details, or job-cost records.
How many 941s does a workers' comp audit need?
One for every calendar quarter your policy period touches. Most policies land on four, but a policy that starts partway through a quarter covers five. A policy running January 15 to January 14, for example, touches Q1 through Q4 of the first year plus Q1 of the next. This tool works out the exact quarters from your policy dates.
Should I use my policy period or the calendar year?
The policy period, always. Pulling January through December when your policy runs July through June means every figure is wrong and the audit gets sent back. Your policy dates are on the declarations page.
Why does overtime need to be in its own column?
In most states the premium portion of overtime is excluded from the audit basis, so someone earning $30 an hour who is paid $45 for overtime is rated on the $30 base. That exclusion is only available if your payroll report separates overtime from regular wages. A single combined gross figure means there is nothing to subtract and the full amount gets rated.
What happens if a subcontractor has no certificate of insurance?
In most states the carrier may treat what you paid that subcontractor as your payroll, rated at your class code. It is the most expensive single line in a premium audit. The certificate also has to cover the dates the person actually worked for you — a current certificate does not prove coverage existed eight months ago.
Is this checklist free to use?
Yes. There is no sign-up, no email required, and nothing is stored on a server. Your answers stay in your own browser so the page remembers them if you come back.
For the full walkthrough of how an audit runs from assignment to final report, read what actually happens in a workers' compensation audit.