How to Convert a General Liability Rate to Hourly

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General liability insurance is typically charged based on the amount of payroll you issue. Some companies may want to determine the rate at which general liability insurance is charged per hour of payroll issued. This information may be included in an overhead expense billed to customers to help absorb some of the costs to operate. You may convert your general liability insurance rate to an hourly rate in a few simple steps.

  • Determine your general liability insurance rate. Your rate is listed on your insurance documents but may be listed as a rate per dollar amount of payroll. For example, you may pay $35 per $1,000 of issued payroll. In this case, you must determine your rate by dividing the premium by the payroll increment. The general liability rate in this example is .035, or 3.5 percent.

  • Calculate the hourly wage for your employee. Use the regular base hourly wage. If you have employees with different hourly wages, you may create a list of the different hourly rates you pay.

  • Apply the general liability rate to the hourly wage. For example, if your employee earns $15 per hour and your general liability rate is 3.5 percent, multiply $15 by .035. The result is .53, or 53 cents per hour.

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