Workers compensation insurance payable definition
/What is Workers Compensation Insurance Payable?
Workers compensation insurance payable is a liability account that contains the unpaid amount of insurance premiums owed by an employer to its workers compensation insurance provider. The balance in this account tends to be low, since workers compensation insurance is typically payable in advance of the period to which it applies.
If a business operates in several states, it may elect to store this liability in a separate account for each of the states to which it is payable, in order to maintain tight control over which governments are to be paid, and the quantities to be paid.
Presentation of Workers Compensation Insurance Payable
This account is classified as a current liability, since the liabilities it contains are typically due and payable in less than one year. It is frequently combined with other payables and presented on the reporting entity’s balance sheet within the Other Payables line item, since its balance tends to be relatively low in comparison to a firm’s other liability accounts.