Workers Comp Rates in Texas (TX)
The average workers' compensation rate in Texas is $0.90 per $100 of payroll , effective as of 2025-01-01. This is $0.29 (24.4%) below the national average of $1.19 per $100. Texas has a competitive insurance market where employers can purchase workers' comp from private insurers. Texas is the ONLY state where workers' compensation is optional for private employers. Employers who do not carry coverage ('non-subscribers') lose key common-law defenses if sued by injured workers. Despite this, about one-third of Texas employers opt out.
Workers Comp Requirements in Texas
Workers Comp Rates by City in Texas
The table below shows average workers' compensation rates for 7 cities in Texas, sorted by rate from highest to lowest. Rates range from $0.82/$100 in Austin to $1.05/$100 in Midland. Actual rates depend on your industry class code and claims history.
| City | Rate/$100 | Est. Cost ($250K) | vs. State Avg | vs. National Avg | Notes |
|---|---|---|---|---|---|
| Midland | $1.05 | $2,625 | +$0.15 | -$0.14 | Oil/gas, higher risk |
| Houston | $0.95 | $2,375 | +$0.05 | -$0.24 | Largest city, oil/gas |
| El Paso | $0.92 | $2,300 | +$0.02 | -$0.27 | -- |
| Fort Worth | $0.90 | $2,250 | Same | -$0.29 | -- |
| Dallas | $0.88 | $2,200 | -$0.02 | -$0.31 | -- |
| San Antonio | $0.85 | $2,125 | -$0.05 | -$0.34 | -- |
| Austin | $0.82 | $2,050 | -$0.08 | -$0.37 | Tech hub, lower risk |
How Texas Compares to Other States
Below is a comparison of Texas with five states that have similar workers' compensation rates. This comparison helps illustrate where Texas stands nationally in terms of workers' comp costs and requirements.
| State | Rate/$100 | Type | Min Employees | Waiting Period | Est. Cost ($250K) |
|---|---|---|---|---|---|
| Texas (TX) | $0.90 | Competitive | 1+ | 7 days | $2,250 |
| Colorado (CO) | $0.92 | Competitive | 1+ | 3 days | $2,300 |
| Idaho (ID) | $0.95 | Competitive | 1+ | 5 days | $2,375 |
| South Dakota (SD) | $0.95 | Competitive | 1+ | 7 days | $2,375 |
| Utah (UT) | $0.85 | Competitive | 1+ | 3 days | $2,125 |
| Kentucky (KY) | $0.98 | Competitive | 1+ | 7 days | $2,450 |
Workers Comp Cost Examples for Texas
The following table shows estimated annual workers' compensation costs for various payroll sizes in Texas using the state average rate of $0.90 per $100 of payroll. Actual costs depend on your industry class code and experience modifier.
| Annual Payroll | Est. Annual Premium | Est. Monthly Cost |
|---|---|---|
| $50,000 | $450 | $38 |
| $100,000 | $900 | $75 |
| $250,000 | $2,250 | $188 |
| $500,000 | $4,500 | $375 |
| $1,000,000 | $9,000 | $750 |
| $2,500,000 | $22,500 | $1,875 |
Frequently Asked Questions About Workers Comp in Texas
How much does workers comp cost in Texas?
The average workers' compensation rate in Texas is $0.90 per $100 of payroll. For an employer with $250,000 in annual payroll, that works out to approximately $2,250 per year. However, actual rates vary significantly by industry. Office workers may pay as little as $0.20/$100 while high-risk industries like construction or logging can exceed $10/$100.
Is workers comp required in Texas?
Workers' compensation is optional for private employers in Texas. However, employers who do not carry coverage ("non-subscribers") lose key common-law defenses if an employee sues for a workplace injury. About one-third of Texas employers choose not to carry workers' comp.
Where can I buy workers comp in Texas?
Texas has a competitive workers' compensation market. You can purchase coverage from any licensed private insurance company, through an insurance agent or broker, or in some cases through a state-sponsored program. Shopping multiple carriers is recommended to find the best rate for your industry and claims history.
What is the waiting period for workers comp in Texas?
The waiting period in Texas is 7 days. This means an injured worker must wait 7 days before receiving wage replacement benefits. Medical benefits typically begin immediately. If the disability extends beyond a certain number of days (usually 14-21 depending on the state), the waiting period benefits are paid retroactively. The maximum weekly benefit in Texas is $1,053.
Estimate Your Workers Comp Cost
Use our workers comp cost calculator to estimate your premium based on your specific payroll in Texas, or browse all 50 states to compare workers' comp rates across the country. Remember that actual rates depend on your industry classification, claims history, and experience modification rate.