DATE: February 25, 2026
Update: Nevada SB 317 and the New Payroll Cap
Following the transition of Nevada SB 317, which moves the state toward a workers’ compensation payroll cap model, the NCCI has released a critical update regarding wage limits for the 2026-2027 cycle.
Here is what you need to know for your upcoming renewals.
- The New Maximum Annual Payroll
The Nevada Division of Industrial Relations (DIR) has officially confirmed the maximum wage limit for Fiscal Year 2026.
- New Cap: $98,433.60 per employee, per year.
- The previous cap of $36,000 was put in place in 1999 and has not changed.
- Effective Date: This cap applies to policies issued on or after October 1, 2026.
2. What Remains Unchanged?
It is important to note that SB 317 does not apply across the board. The following categories will continue to follow their existing maximum ($36,000) pay rules as outlined by NCCI and Nevada statutes:
- Corporate Officers (Quasi-public, private, and nonprofit).
- LLC Managers (per NRS 616B.624).
- Sole Proprietors and Partners (per NRS 616A.210).
What this means for you:
Previously, if an employee earned $100,000, you might only pay premiums on the first $36,000 of their salary. Under the new rules, you will pay premiums on nearly their entire salary.
NCCI, the governing organization responsible for setting rates for carriers offering workers’ compensation coverage in Nevada, has projected a state-wide rate increase.
With potentially higher rates in Nevada and a higher taxable payroll base, many Nevada employers could experience some of the largest insurance increases in recent history.
Understanding Executive Payroll: What SB 317 Doesn’t Change
While the recent buzz around Nevada SB 317 focuses on the massive jump in payroll caps for general employees, it’s just as important to know what isn’t changing. For many business owners, officers, and managers, the old rules still apply.
Here is a breakdown of the existing Nevada Revised Statutes (NRS) that continue to govern executive and owner payroll reporting.
1. Corporate Officers & LLC Managers
If you are an officer of a corporation or a manager of an LLC, your reportable payroll is strictly controlled by NRS 616B.624.
- The “Deemed” Wage: Even if you take a six-figure salary, your workers’ comp premium is calculated based on a fixed range.
- Minimum: $6,000 per policy year ($500/month).
- Maximum: $36,000 per policy year.
- The Pay Exception: If an officer or manager receives no pay at all, they are still “deemed” to have earned $6,000 for the purpose of the premium calculation.
- Rejection of Coverage: Most officers and managers have the right to reject coverage entirely by submitting a written notice to their insurer.
2. Sole Proprietors & Working Partners
The rules for unincorporated business owners (Sole Proprietors) and partners are found in NRS 616A.210 and 616B.659.
- Standard “Deemed” Wage: For most, the payroll amount used for rating is $6,000 per year.
- The Contractor Rule: If you are a sole proprietor acting as a licensed contractor under NRS 624, the rules are stricter. You may be required to use a higher payroll basis—often starting at$26,000 per year—to ensure proper coverage for the risks associated with the trade.
Why This Matters for 2026
The new SB 317 cap of $98,433.60 is specifically designed for your general workforce.
If you were to mistakenly apply this new $98k cap to a corporate officer who is legally capped at $36k, you would be significantly overpaying on your premium.
3. The Bottom Line on Premiums
The industry goal for this transition is statewide premium neutrality. However, “neutrality” for the state doesn’t always mean a flat rate for every business.
- Individual Impacts: While the overall system balance is maintained, individual policies will vary.
- Ongoing Research: NCCI is currently evaluating how this cap will ripple through loss costs, manual rates, and rating values.
Looking Ahead
The next update is expected on January 1, 2027.
We recommend employers review high-earning employees now to estimate how the $98,433.60 cap will affect their fourth-quarter reportable payroll.
