pay as you owe workers comp
Many clients find it challenging to pay large up-front premium deposits to bind workers’ compensation coverage and make timely installment payments. They also find it increasingly difficult to comply with ever-changing IRS tax-filing rules. The answer many agents offer is a popular “cash flow” payment option known as pay-as-you-owe (PAYO), sometimes referred to as pay-as-you-go. This payment option gives businesses a more efficient way to pay their worker’s compensation premium.
How Do Pay-as-You-Owe Payment Plans Work?
A pay-as-you-owe payment plan enables businesses to pay their worker’s compensation premium based on actual payroll each pay period, rather than on annual payroll estimated 12 months in advance. This allows businesses to pay their workers’ compensation premium in a more accurate manner throughout the year.
The pay-as-you-owe payment plan can both automate and streamline the process for businesses of all sizes. The premium is calculated at the time of payroll processing and paid directly to the insurance carrier, eliminating the need for businesses to write checks or pay by invoice.
5 Top Benefits of Pay-as-You-Owe Payment Plans
- Improve cash flow by reducing upfront money needed to bind coverage
- Increase payment amount accuracy by allowing clients to pay exactly what is owed each pay period, based on actual payroll
- Simplify audit process by reducing the chance of audit surprises
- Automate payments to prevent missed deadlines
- Budget more effectively by helping clients to have better control over workers’ compensation business expenses
Does Your Carrier Offer PAYO?
A seamless pay-as-you-owe payment plan frees your clients up to do what they do best — focus on your business.
There is no downside to using a pay-as-you-owe payment plan — but the benefits are significant.