Tools And Information To Help Your Business Thrive
Frequently Asked Premium Audit Questions
We include the following:
- Salary and wage information you report to the IRS in a W-2 form
- Retail value of any parts or materials given to employees
- Auto allowances paid at a flat amount
- Lodging value if it is provided instead of pay (some classes of business require lodging value always be added – e.g., property management classifications or farm classifications)
The following is excluded from your premium calculation:
- Employer contributions to a 401(k) plan
- Value of meals provided to employees if added to payroll only for tax purposes
- Value of lodging, only if you would not pay the employee more if lodging were not provided (some classifications require all lodging values be reported)
- Personal use of a company provided vehicle if added to payroll only for tax purposes
- Declared tips
- In the State of California only, if you have an IRS approved Section 125 (Cafeteria) plan, you may exclude the pre-tax deductions set aside for such items as medical, dental, and vision premiums
Note: It is important to notify your Zenith agent of any changes affecting your annual payroll. This is especially important when adding to staff or opening a new operation.
Though overtime calculation rules may vary by state, deducting the excess overtime may result in savings for your business. You may exclude the increased or excess portion of overtime wages by 1/3 for time-and-a-half or by 1/2 for double time. For example:
Regular Time 40 hours at $10.00 = $400.00 (regular wages)
Time and a half 5 hours at $15.00 = $75.00 (total overtime wages) = $475.00 (gross wages)
Subtract 1/3 of excess $75.00/3 = $25.00 (excess overtime) = $450.00 is total chargeable wages for workers’ compensation premium
We need a signed letter stating the following:
- The name of your business
- Your Zenith policy number (starts with a “C” or “Z”)
- A phone number and e-mail address to reach you
- A written, detailed description of the issue(s) you are disputing on your audit.
If your account was physically audited, review a copy of the auditor’s worksheets prior to submitting the dispute. This will enable you to pinpoint what it is you are disputing. To request a copy of the worksheet, use the information above to contact us.
We do our best to review and respond to all disputes within 14 days of receipt. Depending on the nature of the dispute, we may need to refer it back to the original field auditor, in which case it may take longer to resolve.
We require that you pay only the undisputed portion of your outstanding balance or 50% if the undisputed portion cannot be readily determined.
It depends. If you hire an independent contractor to provide services, the criteria below can help you determine whether he/she should be treated as an employee.
- If you pay a contractor who is required to have a license, but is not licensed, he/she is your employee.
- If you supply the tools, and the work is performed on your premises at your direction, this person is an employee. Include payments as payroll.
- If the services provided are an integral part of your business, the person is likely an employee. Include payments as payroll.
- If the person is paid through commissions, piecework or by the hour, it indicates an employee/employer relationship. If paid by the job, this is likely an independent contractor and payments should not be included in payroll reporting.
- If the person performs work in the same capacity for other businesses, he/she is probably an independent contractor and should not be included in payroll reporting.