Workers compensation insurance

Workers compensation insurance provides protection for employees who suffer a job-related illness or injury. Entire cost is generally paid by the employer. Cost depends on how many employees a company has, accident history, risk factors associated with the job, etc.

Employer makes a payment at the beginning of the year using an estimated payroll figure for the year.

Debit - Workers' Comp. Insurance Expense

Credit - Cash

When end of the year comes, actual amount is figured and more is sent in, or a refund is given to employer.