Reporting too much payroll for the policy period would give you a return of premium at time of audit, but could strain your cash flow through the policy year. Under reporting payroll could leave you with a large audit balance to be due immediately at completion of audit. To avoid over and under paying, it is important to properly estimate your annual payroll and adjust as your business grows through the year. As a starting point use the number of routes that your business will manage, how many employees you will have per route, and expected weekly pay per employee on that route.
For illustrative purposes only:
- Your business has 5 routes. You plan on using 2 employees per route at $15 an hour. With overtime, you expect to pay each employee $825 per week.
- $825 x 2 (employees on each route) x 5 number of routes = $8,250 in weekly payroll.
- $8,250 x 52 = $429,000 in annual payroll for drivers and helpers.
- Your business may also have clerical and owner payroll to consider when reporting.