Workers' Compensation Insurance for Hair Salons Cost | 2025
Workers' compensation insurance cost for hair salons in 2025 averages $0.52 per $100 of payroll. That’s roughly $19 a month per employee. This insurance pays employees for work-related injuries or illnesses while shielding the business from potential lawsuits.
What is Workers' Comp Premium for Hair Salon Workers based on?
Industry Risk
The cost of workers' comp insurance varies by industry because some jobs are riskier than others. The National Council on Compensation Insurance (NCCI) classifies all types of job roles into separate categories. They assign a four-digit code called a class code to easily refence each role. They analyze historical data to assess the likelihood of workplace injuries and assign a different rate for each role in every state.
Hair salons are considered very low risk. Injuries are uncommon and typically include minor slip-and-fall accidents or repetitive motion issues. These low-risk factors keep workers' comp costs lower compared to higher-risk industries like construction. For more details, check out our guide to Workers Comp Codes for Hair Salons and Beauticians.
Payroll
The more stylists you employ, the more you'll pay for workers' comp. However, since the industry risk is low, the rate per $100 of payroll remains on the lower side.
Claims History
If your salon has a clean safety record, you’re likely to pay less in premiums. However, even one or two claims—like slips on wet floors or wrist injuries—can push your rates higher.
How are Hair Salon Workers' Comp Premiums calculated?
Here’s the formula to calculate your workers' comp premium:
Payroll divided by 100 x rate = Premium
Step 1: Calculate the Payroll
Add up the total annual payroll for all salon employees.
If annual figures are unavailable, calculate each employee's hourly rate by multiplying it by weekly hours and then multiplying that by the number of weeks worked in a year.
Step 2: Find your Rate
Determine the workers' comp rate for your industry and state:
- Use the national average rate for hair salons, which is $0.52 per $100 of payroll.
- Check your existing policy or ask your agent for your exact rate.
Let’s work through an example together:
Let's say you own a hair salon in Alabama with a team of 1 full-time stylist, 1 part-time stylist, and 1 full-time receptionist. Your team needs to be covered by a workers' compensation insurance for hair salons policy under Code 9586 that you, as the employer, pay for and provide. Let's use the formula to figure out your premium.
Payroll divided by 100 x rate = Premium
Step 1: Calculate Payroll
We need the annual payroll of each employee.
- The full-time stylist earns $21/hour, multiplied by 40 hours per week and 52 weeks, for an annual payroll of $43,680.
- The part-time stylist earns $21/hour, multiplied by 30 hours per week and 52 weeks, for an annual payroll of $32,760.
- The full-time receptionist earns $21/hour, multiplied by 40 hours per week and 52 weeks, for an annual payroll of $43,680.
Step 2: Determine Rates
Now you have to figure out which class code applies to each employee and find the corresponding rate.
- The stylists are classified under Code 9586 with Alabama’s rate of $0.49.
- The receptionist is classified under class code 8810 with Alabama’s rate of $0.14.
Step 3: Apply the Formula
Here’s how to apply the formula. You need to do it separately for each class code.
Class Code 9586 (Stylists):
- First, add the payroll for the stylists:
$43,680 (full-time stylist) + $32,760 (part-time stylist) = $76,440 - Apply the formula:
$76,440 (payroll) divided by 100 x $0.49 (rate) = $374.56
Class Code 8810 (Receptionist):
- Apply the formula for the receptionist:
$43,680 (payroll) divided by 100 x $0.14 (rate) = $61.15
Total Annual Premium:
- $374.56 (stylists) + $61.15 (receptionist) = (bold)$435.71 annual premium
Monthly Premium:
- $36.31
Remember that the actual premium may vary depending on factors such as your business's experience modification number, specific state regulations, and any discounts provided by your insurance carrier.
Annual Cost of Workers' Comp for 9586 Hair Salons
To estimate what a full-time employee in a hair salon might cost for workers' comp insurance, here’s a breakdown of average premiums across a few states.
Disclaimer: All data has been derived by combining ZipRecruiter national payroll averages per industry with average rates of a national carrier partner. Figures are for illustrative purposes only and do not include taxes or additional fees.
Does it matter where I buy a Policy from?
Absolutely, it matters! Choosing the cheapest policy might seem like a smart move, but it’s just as important to ensure the coverage truly fits your salon’s needs. As a salon owner, you need a policy that not only provides fair rates but also supports your stylists if they get injured on the job. Here’s what to look for in an insurance provider:
- Reputation: Pick a provider known for quick and efficient claims handling.
- Financial Stability: Ensure the company is financially sound to guarantee claim payouts.
- Customer Service: Look for responsive customer support to address your needs promptly.
- Industry Knowledge: A provider familiar with the beauty industry can better address your specific risks.
What Does Workers' Comp Insurance Cover for Hair Salons?
A workers’ comp policy for hair salons includes:
- Medical Expenses: Covers treatment for illness or injury on the job
- Lost Wages: Replaces a portion of lost income during recovery
- Death Benefits: Provides financial assistance to families in case of a fatal workplace accident
- Legal Protection: Shields your salon business from lawsuits related to workplace injuries
How can I make Workers' Comp cheaper?
Hair salons can reduce workers' comp costs with these strategies:
Establish a Safety Program
- Keep floors dry and clear of hair clippings.
- Use gloves and masks when handling hair dyes or chemicals.
- Install proper ventilation systems to reduce chemical fumes.
Address Repetitive Motion Injuries
Hairdressers are prone to carpal tunnel syndrome and other repetitive strain injuries. Encourage regular breaks and provide ergonomic tools to minimize these risks.
Maintain a Vehicle Maintenance Program
For mobile beauticians, ensure vehicles are regularly serviced to reduce accidents during travel.
Hire Licensed and Trained Professionals
Only employ or contract with individuals who are fully trained and licensed for the services they provide.
Require Contractors to carry Workers' Comp
For booth rental systems, make sure independent contractors have their own workers' comp insurance. This protects your salon from liability and reduces your premiums.
Ask about Safety Discounts
Some insurance providers offer discounts for salons with strong safety protocols and a low claims history.
Curious about your Workers’ Comp Costs?
Looking to lower workers’ comp expenses for your hair salon? Use our online calculator for a customized quote and see how much you could save!
Note: The information provided in this blog is intended for general informational purposes only and is not a substitute for professional legal or insurance advice. Laws and regulations regarding workers' compensation insurance are complex and vary by state and by specific circumstances. Therefore, readers are encouraged to consult with a qualified legal or insurance professional to obtain advice with respect to any particular issue or problem they might have.
Mordechai Kamenetsky, co-founder and lead agent of Kickstand, is recognized as an expert in workers' compensation. He is passionate about helping small businesses manage risks and lower their workers' comp costs. In his articles, he educates readers and clients on the intricacies of workers' comp insurance.
During an audit, your insurance company will review your payroll records to make sure the premiums you've paid match the payroll your employees have received. Payroll included in a workers’ compensation audit includes wages, salaries, bonuses, commissions, and other types of employee compensation.
