Workers' Comp Class Codes Explained: How to Find Yours

Every workers' compensation policy assigns a numeric classification code to each group of employees. That code — often called a “class code” — determines the base rate you pay per $100 of payroll. Get it right and you pay a fair price for coverage. Get it wrong and you could overpay by thousands of dollars, or worse, face penalties for misclassification. This guide explains exactly how class codes work, where to find yours, and what to do if you think your code is wrong.

What Are Workers' Comp Class Codes?

Class codes are a standardized system for grouping employees by the type of work they perform and the level of occupational risk that work carries. The system is maintained by the National Council on Compensation Insurance (NCCI), which publishes the Scopes® Manual containing roughly 700 distinct classification codes.

Each code corresponds to a specific occupation, industry, or activity. For example:

• 8810 — Clerical Office Employees (NOC)
• 8742 — Outside Salespersons
• 5403 — Carpentry — NOC
• 9082 — Restaurant or Tavern
• 5606 — Contractor — Roofing

The “NOC” designation stands for “Not Otherwise Classified” and serves as a catch-all when no more specific code applies. The goal of the system is simple: employers whose workers face similar risks should pay similar rates.

How Class Codes Determine Your Rate

Each class code carries a base rate expressed as a dollar amount per $100 of payroll. That rate reflects the historical loss experience of all employers in that classification — how many injuries occur, how severe they are, and how much they cost to resolve.

The premium formula works like this:

A low-risk class code like 8810 (Clerical) might carry a rate of $0.25 per $100. A high-risk code like 5606 (Roofing) might carry a rate of $15.00 or more. That 60x difference is not arbitrary — it reflects the reality that roofers file dramatically more claims, with far higher medical and indemnity costs, than office workers.

For a concrete comparison, consider two employees each earning $50,000 per year, both with an EMR of 1.0:

This is why classification accuracy is not a paperwork detail — it is one of the biggest financial levers in your insurance program.

Common Class Codes and Their Rates

Below are some of the most frequently used NCCI class codes. Rates shown are approximate national averages; your state's rate may differ. You can look up exact rates by state on our class codes directory.

How to Find Your Class Code

There are several ways to identify the correct classification code for your employees:

1. Check your current policy declarations page. Your existing workers' comp policy lists every active class code, along with the payroll assigned to each one. This is the fastest starting point.
2. Use an online lookup tool. Our class code lookup directory lets you search by industry or keyword to find the right NCCI code.
3. Consult the NCCI Scopes Manual. The Scopes Manual is the definitive reference. It provides a detailed narrative for each code describing exactly what operations belong in that classification. Access is available through NCCI's website or your insurance agent.
4. Ask your insurance agent. An experienced workers' comp agent can review your operations and recommend the correct codes. This is especially valuable if your business involves multiple types of work.
5. Contact your state bureau. In states that don't use NCCI (more on that below), the state rating bureau can help you find the equivalent code.

When identifying your code, focus on what employees actually do, not their job titles. A “project manager” who spends 80% of their time on a construction site performing physical work is not a clerical employee, regardless of their title.

The Governing Class Code

Most businesses with multiple employee types will have more than one class code on their policy. The governing class code is the classification that applies to the largest portion of your payroll. It plays a special role because it's used as the baseline for certain premium calculations and audit procedures.

For example, a general contractor might have:

• 5403 (Carpentry) — $300,000 in payroll (governing class)
• 8810 (Clerical) — $80,000 in payroll
• 8742 (Outside Sales) — $60,000 in payroll

Because carpentry carries the largest payroll, 5403 is the governing class code. You can split payroll between codes when employees genuinely perform work under different classifications — but only if you maintain accurate time records. Without documentation, the auditor will assign all of that employee's payroll to the highest-rated code.

Independent Bureau States

While NCCI sets classification standards for the majority of states, 11 states maintain independent rating bureaus with their own class code systems. These states are:

• California (WCIRB)
• Delaware
• Indiana
• Massachusetts
• Michigan
• Minnesota
• New Jersey
• New York
• North Carolina
• Pennsylvania
• Wisconsin

If your business operates in one of these states, your class codes may use a different numbering system or have different definitions than standard NCCI codes. For instance, California's WCIRB uses many of the same numbers but defines them differently in certain cases. Always verify codes using the applicable state bureau. You can find state-specific rate details on our state rate pages.

Misclassification Risks

Getting your class codes wrong — whether intentionally or by accident — carries real consequences:

• Audit adjustments: Insurance carriers conduct annual premium audits. If the auditor finds employees assigned to the wrong class code, they will reclassify the payroll and issue an additional premium bill. These surprise charges can be substantial — tens of thousands of dollars for mid-size businesses.
• Penalties and fines: Intentional misclassification to lower premiums is considered fraud in most states. Penalties can include fines, policy cancellation, and even criminal charges.
• Coverage disputes: If a claim arises from work that was not properly classified, it can create disputes about coverage. While the insurer must generally pay the claim, the resulting audit adjustment and EMR impact will be painful.
• Overpayment: Misclassification cuts both ways. Many businesses unknowingly assign low-risk employees to high-risk codes and overpay for years. A classification audit by an experienced agent can uncover these errors and generate immediate savings.

The best defense is a proactive annual review. Before your policy renews, sit down with your agent and walk through every class code and the payroll assigned to it. If your operations have changed — new services, new roles, new locations — your codes may need updating.

How to Split Payroll Between Codes

Employees who perform work falling under multiple class codes can have their payroll divided — but only under strict conditions. NCCI rules require:

1. The employee must perform duties that fall under two or more distinct class codes.
2. The employer must maintain accurate time records showing how many hours the employee spent on each type of work.
3. The records must be available for review during the premium audit.

Without proper records, the auditor will assign 100% of that employee's payroll to the highest-rated applicable code. For a construction company with employees who split time between carpentry (5403) and office work (8810), good record-keeping can save thousands annually. Use our workers' comp calculator to estimate the savings from proper payroll splitting.

Frequently Asked Questions