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Hand The Auditor Everything, The First Time.
Your annual premium audit goes better when payroll records, employee classifications and supporting schedules are ready before the auditor asks. We pull them together and check them, so the final bill reflects the business you actually ran.
Workers' Comp Audit Support For Michigan Employers
Your workers' compensation premium starts as an estimate based on the payroll you expect. After the policy year ends, the carrier audits it against the payroll you actually ran, broken out by the kind of work each person did. When the records are thin or the classifications are off, the audit ends in an extra premium bill or a second round of questions.
We prepare for that audit from records we already keep when we run your weekly or bi-weekly payroll. For employers across Michigan, we pull together payroll registers, classification summaries and supporting schedules, tie them to your filed payroll returns and assemble a complete file for the auditor. Audit help is part of our payroll services and included in the Back Office package.
Why A Wrong Classification Costs Real Money
Carriers set workers' comp premium by classification, because a delivery driver is a different risk from someone at a desk. When an employee lands in the wrong class, you either pay more premium than the work calls for all year, or you get a bill at audit when the carrier corrects it.
It happens in ordinary ways. A furniture store groups its delivery crew with the sales floor. A restaurant files its bookkeeper under the kitchen. Someone changes jobs midyear and their payroll never follows them. We sort payroll by the work each person actually does, so the numbers the auditor sees already tell the right story.
Subcontractors are the other common surprise. If you paid a contractor who cannot show proof of their own workers' comp coverage, the auditor may count those payments as your payroll. The records from our 1099 preparation and filing work, kept with the certificates of insurance your subcontractors provide, make it easier to show the auditor who carried their own coverage.
The Audit File We Build For You
Auditors ask for a fairly standard set of records. We assemble them from your books and payroll platform, then check that they agree with each other.
- Payroll registers for the full policy period, by employee
- Payroll summarized by classification, with duties noted for anyone who changed roles
- Quarterly Form 941s and Michigan unemployment wage reports tied to the payroll totals
- Year-end W-2 and W-3 totals reconciled to the registers
- Subcontractor payments, with the 1099s and certificates of insurance on file
- General ledger detail for wages, contract labor and officer pay
- A short note explaining anything unusual before the auditor has to ask
From The Audit Notice To A Closed File
Most of the work happens before the auditor ever sees a page.
Send Us The Request
Forward the audit notice or the auditor's document list as soon as it arrives. Response windows can be short, and starting early does most of the work.
We Build And Check The File
We assemble the records, reconcile them to your filed returns and correct any classification problems we can see before anything goes to the auditor.
We Review The Result With You
When the audit comes back, we compare it with what we sent and flag anything that looks misclassified or double counted, so you can raise it with your agent or carrier. At your request, we can act as your liaison with your insurance agent.
Common Questions About The Annual Premium Audit
Why do I owe more after the audit?
Usually because actual payroll came in higher than the estimate your premium was based on, or some of it belonged in a higher-risk class than planned. Growth is a good reason to owe more. A mislabeled job or an uninsured subcontractor is not, and those are the items we look for before the file goes out.
Can the audit lower my premium?
It can. If payroll came in below the estimate, or the records show staff belong in a lower-risk class than assumed, the final premium can drop and the difference may come back as a credit or refund. That only happens when the records clearly support it, which is the point of preparing them properly.
Will you deal with the auditor for me?
We answer the auditor's accounting questions through you and explain the numbers to your agent when you want us to. The policy itself, and any disagreement about the result, stays between you and your carrier. Our job is making sure you walk into that conversation with clean, organized records.
The Payroll Records Behind A Clean Audit
Pay runs processed on schedule, with every employee's wages and withholding recorded the way an auditor expects to see them.
Payroll processing in detail 1099-NEC & 1099-MISC FilingContractor payments tracked through the year, with W-9s on file and 1099s filed by January 31.
1099-NEC and 1099-MISC filing in detail Payroll OverviewWeekly and bi-weekly payroll, contractor 1099s and workers’ comp audit support, gathered in one place.
Return to PayrollLet's Get Ready For Your Next Premium Audit
Tell us when your policy renews and where your payroll records live today. We will tell you what the auditor is likely to ask for and what it takes to have it ready.