For decades, Nevada capped the payroll used to calculate workers’ compensation premium at $36,000 per employee per year. Whatever an employee actually earned, premium stopped counting at $36,000.

On October 1, 2026, that number became $98,433.60.

Not an increase. Close to a tripling. And it moves again on January 1, 2027, to $102,452.16.

If you employ people in Nevada and nobody has walked you through this, your next renewal is going to be a surprise. Here is what changed, who it hits, and what to do about it.

What the payroll cap actually is

Workers’ compensation premium is rate times payroll divided by 100, adjusted by your experience modification. Nevada has always limited how much of each employee’s payroll goes into that calculation.

Under the old rule, an employee earning $150,000 and an employee earning $36,000 contributed the same amount to your premium, because both were counted at $36,000. Anything above the cap was free, from a premium standpoint.

Senate Bill 317, passed in the 2025 session, scrapped the fixed figure. The cap is now tied to the state’s maximum average monthly wage, multiplied by twelve, and it gets re-indexed every year. That wage figure comes from Nevada’s Department of Employment, Training and Rehabilitation, and is published through the Division of Industrial Relations.

The arithmetic behind the two numbers, if you want to check it:

• Fiscal year 2026 maximum average monthly wage was $8,202.80. Twelve times that is $98,433.60, effective October 1, 2026.
• Fiscal year 2027 came in at $8,537.68, a 4.1 percent bump. Twelve times that is $102,452.16, effective January 1, 2027.

From there it adjusts annually. The $36,000 figure is gone for most private employers, and it is not coming back.

Who this actually hits

This is where most of the commentary stops short. The change is not uniform. It redistributes cost, and it does it hard.

Take two Nevada employers, both with ten employees, both in the same class code.

Employer A pays ten people $35,000 each. Under the old cap, every one of them was below $36,000, so the rated payroll was the full $350,000. Under the new cap, nothing changes. Still $350,000.

Employer B pays ten people $95,000 each. Under the old cap, each was counted at $36,000, so the rated payroll was $360,000 on a real payroll of $950,000. Under the new cap, every dollar is now inside the limit. The rated payroll is $950,000.

Same headcount. Same class code. Employer B’s premium base just went up by 164 percent, and Employer A’s did not move at all.

The higher your wages, the harder this lands. Professional services, engineering, specialty trades, management-heavy operations, anybody with licensed or credentialed staff: you were the ones benefiting most from a $36,000 ceiling, and you are the ones absorbing the change.

“Premium-neutral” is doing a lot of work in that sentence

NCCI, which develops the rates in Nevada, expects the change to be premium-neutral statewide.

Read that word again. Statewide.

Neutral in aggregate means the total collected across Nevada stays roughly flat. It is achieved by lowering rates while the payroll base they apply to goes up. For the state as a whole the two movements cancel. For any individual employer they absolutely do not.

This produces the single most confusing renewal conversation you will have this year: your rate went down and your premium went up. Both things are true at the same time, and if you only look at the rate you will think somebody made a mistake.

If your workforce skews high-wage, a lower rate applied to two or three times more rated payroll is a much bigger bill. If your workforce skews low-wage, you may genuinely come out ahead, because your base barely moved and the rate fell.

Neither outcome has anything to do with your safety record. That is the part worth sitting with. You can have a flawless year, an unchanged experience modification, the same crew, and still open a renewal with a number you do not recognize.

Your renewal date is now a strategic fact

Here is a detail almost nobody has flagged, and it is the most actionable thing in this article.

The cap in effect on your policy’s effective date applies for the entire policy term. There is no mid-term adjustment. Nevada’s Division of Insurance has been clear on this.

Which means three identical companies can be living under three different caps right now:

• A policy that renewed on September 30, 2026 keeps the $36,000 cap for its full term, all the way into late 2027.
• A policy incepting between October 1 and December 31, 2026 runs on $98,433.60 for its full term.
• A policy incepting January 1, 2027 or later runs on $102,452.16.

If you are high-wage and your policy renewed just before October, you have a year of runway that your competitor who renews in January does not. Use it to budget, not to ignore the problem. And if you are considering any change to your renewal date, understand that you are also choosing a cap.

Who stays at $36,000

The old cap survives for a specific list, and it is worth checking whether you are on it:

• Nevada state employees and employees of its agencies and political subdivisions, unless the employer elects the new cap.
• Officers of quasi-public, private and nonprofit corporations, and managers of LLCs, under NRS 616B.624.
• Sole proprietors, working partners and members of working associations, under NRS 616A.210 and NRS 616B.659.

That last group matters more than it looks. If you are an owner who elected coverage on yourself, your own payroll is probably still capped at $36,000 while your employees’ is not. Worth confirming rather than assuming, because it changes how you should think about owner compensation.

What it does to your audit

Your deposit premium is an estimate. The audit is the real bill, and it arrives after the policy year, when the money is already spent.

If your payroll estimate was built on the old cap and your policy now runs on the new one, the gap between what you were billed and what you owe could be enormous. That is not a rate problem you can argue about later. It is arithmetic on payroll you already paid out.

Two things to do about it:

• Revise the payroll estimate on the policy now, using uncapped wages up to the new limit. You would rather pay it across twelve months than in one bill.
• Make sure your payroll records support your class code splits. With far more payroll now exposed to rating, an auditor assigning ambiguous payroll to the highest-rated class that applies costs you considerably more than it used to. The old cap quietly limited that damage. It does not anymore.

If you are a California company with Nevada employees

This catches people. Workers’ compensation follows the state where the work is performed, not where your office is. A California business with a Nevada branch, a Nevada crew, or employees who regularly work across the line has Nevada exposure, and that payroll is rated under Nevada rules.

California has no equivalent per-employee cap, so a company operating in both states has been running two different systems without necessarily realizing one of them just changed. If you have Nevada payroll on your policy, check which cap applied to it and when.

What to do in the next thirty days

• Find your policy effective date and determine which of the three caps applies to you right now.
• Pull a payroll report and count how many employees earn more than $36,000. That headcount is the size of your exposure to this change.
• Recalculate your rated payroll under the new cap and compare it to what your policy is currently estimating.
• Ask your broker for the rate comparison, not just the premium. If your rate came down and your premium went up, you want to see both numbers to understand what actually happened.
• Check whether owners and officers on your policy are still capped at $36,000.
• If you renew January 1, make sure the quote in front of you is built on $102,452.16 and not on last year’s assumptions.

Where we come in

We are a commercial insurance brokerage in Encino, and this is exactly the kind of change we exist to catch before it becomes an audit bill.

Send us your current declarations page, your payroll by class code, and your experience modification worksheet. We will tell you which cap your policy is running on, what your rated payroll actually becomes under the new limit, whether your deposit premium needs revising before the audit finds the gap, and whether the rate movement on your renewal is reasonable given what happened to the base.

If your program is built correctly and this change is simply a cost you now carry, we will tell you that. Not every review finds money. The ones that do usually find it in the payroll, not the rate.

If you want the background on how premium is calculated and how an experience modification works, our workers’ compensation page covers it, and the audit side is under audit and payroll review.

Call us at (888) 590-2667 or send the paperwork over and we will take it from there.

This article is general information about Nevada workers’ compensation premium rules. It is not legal advice and it is not a description of any specific policy. Cap amounts are indexed annually and the figures above reflect NCCI and Nevada Division of Industrial Relations guidance current as of publication; verify your own figures with your carrier, the Nevada Division of Industrial Relations or your broker. Coverage and premium are determined by the terms of the policy you hold.