Workers' Compensation insurance for Amazon DSPs

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

Since new employees are not included in your initial business’ projected annual payroll, it will be discovered during the audit and noted that payroll was understated, causing additional premium to be due. Should payroll projections change due to new employees added to the business, you should update the policy during its term. You can easily complete the renewal application to update your payroll or call a member of your dedicated regional account team. 

Workers’ Compensation insurance generally includes the following types of pay in determining payroll for premium purposes:

• Employee wages and salaries (including pay for holidays, vacations or sickness)
• Executive officer wages (minimum/maximum rules apply)
• Commissions and bonuses
• Expenses (considered as additional wages, but may be excluded if adequate records kept)
• Extra pay for overtime (rules vary by state)
• Wages paid for time not worked or idle time
• Employers’ payments on behalf of the employee to incentive plans and profit-sharing plans (subject to limitations by state)
• Cash value of meals furnished to employee as part of wage