Workers’ comp for landscaping is classified as high-risk work, which means significantly higher premium rates than office-based businesses. Rates are set by job classification codes, and landscaping falls into codes that reflect the physical nature of the job. Operating mowers, working on slopes, handling chemicals, and lifting heavy materials all push the rate up. Your insurer assigns a cost per $100 of gross payroll for each classification, and the field crew rate for a landscaping company is going to be much higher than the rate for any office or admin staff you might have.

Premiums start as estimates. When you set up or renew your policy, the insurer asks what you expect to pay in total wages for the coming year, broken down by job classification. They multiply those payroll estimates by the corresponding rates to calculate your annual premium, which you typically pay in monthly or quarterly installments.

At the end of the policy year, the insurer conducts an audit. They compare the estimated payroll used to set your premium against your actual payroll for the year. If you hired more crew than expected or ran heavier overtime during the busy season, your actual payroll exceeded the estimate and you’ll owe additional premium. If payroll came in lower, you get a credit.

Here’s where most landscaping companies get the bookkeeping wrong. They record the premium payment when it hits the bank and then get surprised by a large charge or credit at audit time. That year-end adjustment distorts whatever month it lands in, making your financial statements unreliable.

The better approach is to accrue workers’ comp expense monthly based on your actual payroll for that month. Take your rate per $100 of payroll and apply it to the gross wages you actually paid. Record that calculated amount as workers’ comp expense each month, and track the difference between what you’ve accrued and what you’ve paid to the insurer in a liability account. When the year-end audit happens, the adjustment should be minimal because your books have been reflecting the true cost all along.

This matters more for landscaping than for many other industries because of seasonal payroll swings. You might run $25,000 or $30,000 in monthly payroll from April through October and drop to $8,000 in January. Paying a flat estimated premium every month while your actual labor costs swing that dramatically means your monthly financials are wrong in both directions.

If you have employees who split time between field work and office duties, make sure their payroll is allocated to the correct classification codes. Misclassification can mean you’re overpaying premiums at the higher field rate for hours spent doing admin work. Clean payroll records organized by job code make the year-end audit smoother and can save you real money.

Talk to your insurer about adjusting your estimated payroll mid-year if your business is growing quickly or if you’ve had a slower season than expected. Keeping estimates closer to reality reduces the size of the year-end true-up and helps with cash flow planning. Home and property service businesses like landscaping companies deal with this constantly, and getting the accrual right gives you monthly financials you can actually trust.

If your books currently just show premium payments as they come in, it’s worth fixing the approach going forward. As Dodge County bookkeepers who work with trades and outdoor service businesses, we see how much clearer the financial picture gets when workers’ comp is accrued properly instead of treated as an afterthought at audit time.