TexasWorkers' Compensation Insurance Requirements (2026)
Last updated: 2026-03-27
Summary: Texas does not requireworkers' compensation insurance for employers with No threshold — voluntary for most private employers. Average cost is $0.86 per $100 of payroll ($32/month). Maximum weekly benefit: $1,092. Purchase from private carriers or state fund. Waiting period: 7 days. Claim filing deadline: 1 year from injury.
Is workers' comp required in Texas?
| Required? | VoluntaryNot required for most private employers (Texas is a non-subscriber state) |
|---|---|
| Employee Threshold | No threshold — voluntary for most private employers |
| Exemptions | Private employers can opt out. Public employers and carriers of certain government contracts must carry coverage. |
| Monopolistic State? | No — buy from private insurers |
| Purchasing Options | Private carriers, Texas Mutual Insurance Company (state fund), self-insurance |
How much does workers' comp cost in Texas?
| Avg Cost per $100 Payroll | $0.86 |
|---|---|
| Avg Monthly Premium | $32/mo |
Estimate your premium in Texas
Estimate Your Workers' Comp Premium
This is an estimate only. Actual workers' comp premiums depend on your specific NCCI or state classification code, experience modification rate (EMR), carrier, deductibles, and state regulations. Contact a licensed insurance agent for an accurate quote.
What benefits do injured employees receive in Texas?
| Max Weekly Benefit | $1,092 |
|---|---|
| Waiting Period | 7 days |
| Retroactive Period | 28 days |
| Death Benefits | 75% of avg weekly wage to dependents for duration of dependency |
| Burial Benefit | $10,000 |
What are the reporting deadlines in Texas?
| Injury Reporting Deadline | 8 days (employer to TDI-DWC) |
|---|---|
| Claim Filing Deadline | 1 year from injury |
What are the penalties for not having workers' comp in Texas?
Non-subscribers must file notice with TDI. Must notify employees in writing. Lose common-law defenses if sued by injured employee.
What Texas Business Owners Need to Know
- •Texas is the only major state where workers' comp is truly optional for most private employers
- •Non-subscribers lose key legal defenses: contributory negligence, fellow-employee negligence, and assumed risk
- •Even without workers' comp, non-subscribers must report injuries and maintain records
- •Building/construction contractors working on government projects must carry coverage
- •Many large Texas employers opt out and use occupational injury benefit plans instead
- •About 30% of Texas employers are non-subscribers
What does workers' comp cover in Texas?
Workers' compensation insurance in Texas covers a range of benefits for employees who are injured or become ill due to their job. Here is what a standard Texasworkers' comp policy includes:
- ✓Medical treatment — all reasonable and necessary medical care for work-related injuries, with treatment directed through the carrier's approved doctor list or HCN
- ✓Temporary income benefits (TIBs) — 70% of the difference between pre-injury and post-injury wages, starting after the 7-day waiting period
- ✓Impairment income benefits (IIBs) — 70% of pre-injury wage for 3 weeks per percentage point of whole-body impairment rating
- ✓Supplemental income benefits (SIBs) — additional payments if the employee has a 15%+ impairment rating and earns less than 80% of pre-injury wage
- ✓Lifetime income benefits — for catastrophic injuries (severe brain injury, third-degree burns, total blindness, paralysis, or loss of both hands/feet)
- ✓Death benefits — 75% of average weekly wage to eligible dependents for the duration of dependency
- ✓Burial/funeral expenses — up to $10,000 for funeral and burial costs
- ✓Vocational rehabilitation — retraining and job placement services if the employee cannot return to their previous type of work
What is NOT covered by workers' comp in Texas?
Not every workplace injury qualifies for workers' comp benefits. Texas law generally excludes the following situations from coverage:
- ✗Self-inflicted injuries — injuries the employee intentionally caused to themselves
- ✗Injuries while intoxicated — injuries caused by the employee's intoxication from alcohol or illegal drugs
- ✗Injuries during horseplay — injuries resulting from the employee's voluntary participation in horseplay or fighting
- ✗Independent contractors — workers classified as independent contractors are not covered under the employer's policy
- ✗Injuries from acts of God — injuries from natural disasters unrelated to the employment
- ✗Off-duty injuries — injuries that occur during personal time, commuting, or non-work activities
- ✗Intentional violations of safety rules — injuries resulting from willful refusal to use safety equipment or follow safety procedures
How much does workers' comp cost by industry in Texas?
Workers' comp costs vary dramatically by industry because some jobs carry higher injury risk. The table below shows estimated rates per $100 of payroll and approximate monthly costs for common industries in Texas. Your actual rate will also depend on your experience modification rate (EMR) and specific classification code.
| Industry | Rate per $100 | Est. Monthly Cost |
|---|---|---|
| Office/Clerical | $0.15–$0.35 | $10–$25 |
| Technology/IT | $0.20–$0.40 | $12–$28 |
| Retail Stores | $0.50–$1.10 | $25–$55 |
| Restaurants | $1.00–$2.50 | $50–$120 |
| Healthcare/Nursing | $1.80–$3.50 | $85–$165 |
| Manufacturing | $1.50–$4.00 | $70–$190 |
| Landscaping | $3.00–$6.50 | $140–$310 |
| Trucking/Transportation | $4.00–$10.00 | $190–$475 |
| Construction (General) | $4.50–$12.00 | $215–$570 |
| Roofing | $9.00–$20.00 | $430–$950 |
How to buy workers' comp insurance in Texas
Purchasing workers' comp in Texas is straightforward if you follow these steps. Whether you are a first-time employer or switching carriers, this process ensures you get the right coverage at a competitive price.
- 1Decide whether to subscribe — Texas is unique: workers' comp is voluntary for most private employers. Evaluate the liability risks of being a non-subscriber (you lose common-law defenses) vs. the cost of coverage.
- 2If subscribing, get your NCCI classification code — Texas uses NCCI classification codes. Your business activity determines your code and base rate. An agent can help you identify the correct codes.
- 3Gather payroll estimates by classification — break down your anticipated annual payroll by job type. Each classification code has a different rate per $100 of payroll.
- 4Get quotes from carriers — compare pricing from private carriers, Texas Mutual Insurance Company (the state fund), and through independent agents. Texas Mutual is the insurer of last resort.
- 5Compare policy terms — look at premium cost, deductible options, claims service reputation, safety resources, and payment flexibility. Texas Mutual offers online payroll reporting and various discounts.
- 6Bind the policy and file required notices — bind coverage and post the required notice (DWC-83 or DWC-83S) informing employees of coverage. Subscribers must file DWC Form-005 with the state.
- 7If not subscribing, file non-subscriber notice — non-subscribers must file DWC Form-005 annually and provide written notice to each employee that the employer does not carry workers' comp.
How to file a workers' comp claim in Texas (employer steps)
When an employee gets hurt on the job, acting quickly protects both the employee and your business. Here is the step-by-step claims process for Texas employers:
- 1Employee reports the injury — the injured employee must notify the employer within 30 days of the injury date. Encourage immediate reporting and document everything.
- 2Report to your carrier within 8 days — file the Employer's First Report of Injury (DWC Form-001) with your insurance carrier and TDI-DWC within 8 days of learning about the injury.
- 3The employee files a DWC Form-041 — the employee must file a claim with TDI-DWC within 1 year of the injury. Help the employee obtain and complete the required forms.
- 4Carrier investigates and responds — the insurance carrier has 15 days to begin paying benefits or deny the claim. The carrier directs treatment through its Health Care Network (HCN) if applicable.
- 5Medical treatment begins — the employee receives treatment from an approved doctor. In HCN plans, the employee must treat within the network for the first 60 days (unless emergency).
- 6Monitor and offer modified duty — stay in contact with the injured employee. Offer modified or light-duty work when the treating doctor approves. This helps reduce claim costs.
- 7Close the claim — once the employee reaches maximum medical improvement (MMI), the treating doctor assigns an impairment rating. Benefits transition based on the rating, and the claim moves toward closure.
How to reduce your workers' comp costs in Texas
Workers' comp premiums are not fixed — there are proven strategies to lower your costs without reducing coverage. These tips can save Texasemployers 10–40% or more on annual premiums:
- ★Implement a formal safety program — OSHA-compliant safety programs reduce injuries and can qualify you for premium discounts of 5-15% with many carriers
- ★Improve your experience modification rate (EMR) — your EMR is based on your 3-year claims history. Fewer claims = lower EMR = lower premiums. An EMR below 1.0 means you pay less than average.
- ★Ensure correct employee classification — misclassifying employees into higher-risk categories inflates your premiums. Audit your class codes annually to ensure accuracy.
- ★Use pay-as-you-go billing — pay premiums based on actual payroll each pay period instead of estimated annual payroll. This improves cash flow and eliminates large year-end audit adjustments.
- ★Establish a return-to-work program — bringing injured employees back on modified/light duty reduces claim costs and duration. This directly lowers your EMR over time.
- ★Consider higher deductibles — if your business can absorb small claims, a deductible program (typically $500-$2,500 per claim) can reduce your premium by 5-20%
- ★Shop your policy regularly — get competing quotes every 2-3 years. Loyalty doesn't always equal the best rate. An independent agent can help you compare multiple carriers quickly.
Frequently Asked Questions
Should Texas employers carry workers' comp even though it's optional?
Most experts recommend it. Non-subscribers lose common-law defenses, meaning injured employees can sue you directly and you cannot argue they were partially at fault.
What is a non-subscriber in Texas?
A non-subscriber is a private employer who chooses not to carry workers' comp insurance. They must file DWC Form-005 with the state and notify employees in writing.
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This is general information, not legal or insurance advice. Requirements change — always verify with the official state agency. Sources: Texas Department of Insurance, Division of Workers' Compensation (TDI-DWC), U.S. Department of Labor.