Nevada is changing how workers’ compensation premiums are calculated, and if you employ higher-wage workers, the change will reach your renewal. Senate Bill 317 (SB 317) was signed into law by Governor Joe Lombardo in June 2025 after passing both chambers unanimously. The core change takes effect October 1, 2026. Here is what Nevada business owners need to know, and what to do before your next renewal.
What SB 317 Actually Changes
For decades, Nevada has been the only state in the country to apply a hard payroll cap when calculating workers’ comp premiums. Since 1999, only the first $36,000 of each employee’s annual wages counted toward your premium. Any wages above that were essentially invisible to the rating formula.
SB 317 retires that flat $36,000 cap for most private employers and replaces it with a higher cap tied to Nevada’s average wage. To be clear: Nevada is not moving to unlimited payroll. There is still a cap, it is just substantially higher and it will move with wages over time.
The Old Cap vs. the New Cap
The new maximum is calculated as 12 times the state’s maximum average monthly wage, and it will be recalculated by the state each January 1. For policies issued or renewing between October 1, 2026 and December 31, 2026, the figures are:
| Period | Maximum Payroll Counted Per Employee |
|---|---|
| Before SB 317 (through 9/30/2026) | $36,000 |
| On or after 10/1/2026 | $98,433.60 (12 × $8,202.80) |
Here is what that looks like in practice. Say you have an employee earning $80,000 a year. Under the old rules, only $36,000 of that wage was used to price their coverage. Starting October 1, 2026, the full $80,000 counts, because it falls under the new $98,433.60 ceiling. For an employee earning $150,000, the rating formula will count $98,433.60 of it rather than $36,000.
Will My Premium Go Up? The Honest Answer.
This is where a lot of the coverage gets oversimplified. The headline “the payroll cap is being removed” makes it sound like every business is about to pay dramatically more. That is not quite accurate, and it is worth understanding why.
When the National Council on Compensation Insurance (NCCI) reviewed SB 317, it also filed a corresponding reduction in loss costs, the underlying rates carriers build premiums on. NCCI cut Nevada loss costs by 32.8% effective October 1, 2026, specifically to offset the larger payroll base created by the new cap. The stated goal is for the change to be premium-neutral statewide.
“Neutral statewide” does not mean “neutral for your business.” It means the system collects roughly the same total premium, redistributed to reflect actual payroll. The practical result:
- Businesses with higher-wage employees (construction, manufacturing, professional services) will generally see premiums increase, because more of their payroll now counts.
- Businesses with lower-wage payrolls that stayed under the old $36,000 cap may see little change, or even a slight decrease, as the rate cut works in their favor.
The only way to know which side of that line your business lands on is to model your actual payroll against the new cap. A general rule of thumb does not substitute for running your real numbers.
Who Is NOT Affected
One detail that is easy to get wrong: the new $98,433.60 cap applies to your general workforce, not to everyone. Corporate officers and LLC managers continue to be governed by their existing maximum payroll rules under Nevada statute. Applying the higher cap to an officer who is still limited under the old framework would mean overpaying. If your policy includes elected coverage for owners or officers, that is a place to double-check the rating after October 1.
Don’t Confuse SB 317 With the March 2026 Rate Increase
Many Nevada employers have already seen workers’ comp premiums climb in 2026, and it is easy to blame SB 317. That increase is a separate event. The Nevada Division of Insurance approved a 21.6% increase in workers’ comp loss costs effective March 1, 2026, driven by rising claim severity, elevated large-loss activity in construction, and wage growth. That increase has nothing to do with the payroll cap change. SB 317 does not begin affecting policies until October 1, 2026, and only at renewal.
What Nevada Business Owners Should Do Now
- Identify your high-wage employees. List anyone earning more than $36,000. The gap between their wages and the old cap is exactly the new payroll exposure entering your premium calculation.
- Confirm your renewal date. The change only applies to policies issued or renewing on or after October 1, 2026. Your current policy is unaffected until it renews.
- Have your premium modeled. Ask your agent to estimate your premium under the new cap so there are no surprises, and so your reported payroll is accurate at issuance rather than corrected at audit.
- Tighten payroll reporting. With more wages now in the rating base, inaccurate estimates create larger audit adjustments. Accurate payroll at the start of the policy protects your cash flow.
- Revisit safety and classification. A clean experience modifier and correct class codes matter more, not less, as the payroll base expands.
Other SB 317 Changes Worth Knowing
The payroll cap is the change with the biggest dollar impact, but SB 317 reforms several other parts of Nevada’s workers’ comp system. Among them: insurers must adopt an Official Disability Guidelines (ODG) Drug Formulary to standardize prescriptions, with phased implementation through July 1, 2027; there are new provisions around mental-health and workplace-stress claims; and there are timelines intended to speed up certain disability determinations. For most employers, these operate in the background of claims handling rather than on the premium statement.
Talk to Us Before Your October Renewal
SB 317 is a structural change to how Nevada prices workers’ compensation, and the impact on your business depends entirely on your payroll mix. Whether you will pay more, less, or about the same is a question we can answer specifically, not generally.
If your workers’ comp policy renews on or after October 1, 2026, now is the time to review it. Contact Advance Insurance & Benefits and we will model your premium under the new cap, check that your officer and owner coverage is rated correctly, and make sure your renewal reflects your actual exposure rather than an audit surprise.
Official SB 317 Resources
- Nevada Legislature: SB 317 overview
- Nevada Division of Industrial Relations: SB 317 FAQ
- NCCI: Nevada payroll cap and premium changes under SB 317
This article is for general informational purposes only and is not legal, tax or accounting advice. Insurance rates, underwriting decisions and policy terms vary by employer and carrier.