Payroll Audit and A Premium Audit – Differences (Not)
Is a Payroll Audit and a Premium Audit different?

I usually receive this question approximately once per month by email. I thought I would address the differences between a payroll and premium audit.
Actually, there are no differences between the two terms. A premium auditor performs a premium audit that is also known as a payroll audit. One thing for employers to remember is the premium audits are much more complex than just examining just the payroll.
There are many areas the Workers Comp premium auditors cover such as (Most of these terms are covered here):
- Classification Codes
- Standard Exceptions
- Subcontractors
- Certificates of Insurance
- Experience Modification Factor (EMod or XMod)
- Premium Discount
- Scheduled Debit/Credit
- Insured Locations
- Other Operations
- Policy Endorsements
- NCCI or State Rating Bureau Info
- Prior audits – if you have the same carrier as the last policy period
- Other info – website, brochures, etc.
- Drivers Expense Logs
- Job Duties / Descriptions
- Ownership Info

I wanted to supply my blog readers with this list as often we hear the word payroll audit.. As you can see from the list, there is much more being examined than just your payroll tax figures.
There is nothing negative concerning a review of the above info. The premium auditor has a right to see just about anything that your company has on file.
One surprising fact is that almost all employers think the premium auditors are actually employees of the insurance carrier. That is often not the case. The premium auditor may very likely be working for a premium audit company instead of a direct employee of the carrier. This fact really makes no difference in the audit. Most auditors will give you their business card upon arrival.
There is one caveat to providing all this information. I will cover that next time.
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