Payroll Report FAQ's

Yes, always report payroll. Even if:

• You have no employees or payroll for the reporting period. Just enter "0" earnings.
• Your policy is cancelled.
• You have a premium audit scheduled.

Below are the most common ‘benefits of employment’ to include or exclude from reportable employee gross earnings. For the full list, please see 39-71-123 MCA.

• Include:

• Paid wages, salary, piecework payments, commissions, bonuses, vacation, holiday, and sick leave pay.
• Earnings/assumed earnings attributable to policy optional and elective coverages.
• Value of employer provided Housing based on DLI rates per county available at erd.dli.mt.gov/employers and search “Value of Employer Furnished Housing”
• Meals, store certificates/credits, and merchandise.
• Other non-monetary compensation (beef, hay, grazing rights, etc.).
• Tips received by employees that are documented for federal tax purposes.
• Incentive plan or profit-sharing arrangement payments.
• Employer contribution to a non-federally qualified employee pension plan.
• Travel time payments for employee to/from work or to/from a specific job site location.
• Employee contribution to insurance, retirement, pension, deferred compensation, or cafeteria plans.

• Exclude:

• Employee expense reimbursements while in travel status such as meals, lodging, & transportation. For unreceipted travel expenses, maximum allowable travel expense reimbursement amounts are set by the state. The amounts are indicated below. Contact us for help.
• Excess part of paid overtime wages: Exclude the excess portion of paid overtime hours worked at an increased rate of pay. For example, an employee whose regular rate of pay is $20 per hour, is paid $30 for one hour of overtime. Include this hour of overtime pay at their regular rate of pay of $20.
• Employer contributions to an employee group insurance or qualified pension plan.
• Dismissal or severance payments, except for time worked and paid vacation or sick leave benefits.

• Miscellaneous:

• Receipted and Unreceipted Travel Reimbursements:

When in travel status, you may exclude receipted employee travel reimbursements.
Unreceipted payments may be excluded up to the following amounts with excess of payment reported with other employee earnings:

• Meals while traveling within Montana on employer business:
• 07/01/2024 to 07/01/2025 - Morning (12:01 am to 10:00 am) $8.25
• 07/01/2024 to 07/01/2025 - Midday (10:01 am to 3:00 pm) $9.25
• 07/01/2024 to 07/01/2025 - Evening (3:01 pm to 12:00 am) $16.00
• Meals while traveling outside Montana on employer business:
• 07/01/2024 to 07/01/2025 - Morning (12:01 am to 10:00 am) $13.00
• 07/01/2024 to 07/01/2025 - Midday (10:01 am to 3:00 pm) $15.00
• 07/01/2024 to 07/01/2025 - Evening (3:01 pm to 12:00 am) $26.00
• Overnight Lodging $12.00
Passenger Vehicle Effective:
07/01/2024 Maximum allowance of $0.670 per mile; 1000+miles $0.640 per mile.

• Dependent Family Members:

For Sole Proprietorships or Partnership entities, coverage is not provided for dependent family members or spouse if the employer can claim them as an exemption for federal income tax purposes; however, coverage may be elected by the employer. Coverage is required for employees who are family members of corporate officers, managers of a manager-managed LLC, or members of a member-managed LLC. Report their actual earnings following their class code “All Other Employees” line in your report.

• Yes, for the housing value portion, include the value of housing set by the Montana Department of Labor and Industry, see: https://erd.dli.mt.gov/work-comp-claims/data-management/edi/value-of-employer-furnished-housing.
• If in addition to providing housing, you also pay the employee’s utilities, add the monetary value to employee earnings.

• The law requires that independent contractors (owners of a business who are free from control or direction from the hiring agent, and is engaged in their own independently established business, occupation, trade, or profession) either have the exemption certificate (ICEC) or purchase workers' compensation insurance coverage for themselves.
• If an independent contractor was hired to perform duties for you, and they meet the definition and requirements of an independent contractor and had an active ICEC or workers’ compensation insurance coverage on themselves at the time they performed work, you do not need to include the amount you paid for that work.
• You are responsible for obtaining proof of their ICEC or workers’ compensation policy and verify if it is in good standing prior to them performing work for you.
• You can find more information about Independent Contractors by visiting https://erd.dli.mt.gov/work-comp-regulations/montana-contractor/independent-contractor or calling the Montana Department of Labor & Industry Employment Standards Division office at (406) 444-7734.

• An owner or officer is automatically excluded from coverage if they qualify under one of the following provisions:
• The owner is the Sole Proprietor
• The owner(s) are working members of a partnership, limited liability partnership (LLP), or professional limited liability partnership (PLLP)
• A Corporate Officer or Manager of a Manager-Managed LLC with aggregate* ownership of 10% or more.

*Aggregate ownership is the combined ownership amount of the elected corporate officer or manager of the manager-managed LLC with their relatives who are also officers or managers. Relatives are considered the spouse, child, adopted child, stepchild, mother, father, son-in-law, daughter-in-law, nephew, niece, brother, or sister.

• The report will indicate if coverage has been elected or a note will be at the end of the report saying, “No owner/officer coverage was elected, so exclude any owner/officer wages from this report.”
• Report the level amount next to the individual’s name in the earnings column.
• If coverage is wanted, you need to elect coverage in advance. Elected coverage levels are subject to minimum and maximum amounts as set by Montana Department of Labor and Industry and is updated annually. 39-71-118 MCA

Your payroll report instructions are personalized for any endorsement(s) on your policy. Below are common volunteer endorsements with reporting instructions. The term “volunteer hours” referenced below means all the time spent during the report period by a volunteer in the service of an employer.

• Volunteer Labor Endorsement: calculate volunteer assumed earnings by multiplying total volunteer hours by the rate of pay regular paid employees receive for doing the same or similar work. Add this amount to the appropriate class code earnings on your Payroll Report.
• Limited Volunteer Endorsement:calculate volunteer assumed earnings specific to the listed Group and/or Individual(s) named on your endorsement by multiplying the total volunteer hours by the rate of pay regular paid employees receive for doing the same or similar work. Add this amount to the appropriate class code earnings on your Payroll Report.
• Volunteer Firefighters & Volunteer Emergency Care Provider:for a volunteer firefighting organization a roster of service must be maintained by the employer and available upon request. A flat assumed annual payroll of $1,000 shall be reported for each member or an assumed monthly payroll of $83.33 if the member starts or resigns services during the policy period. Include this amount to the appropriate firefighting class code on your Payroll Report. For more information, see Volunteer Firefighter Reporting Guide at: https://www.montanastatefund.com/web/docs/volunteer-fire-fighter-payroll-reporting-guide.docx
• Volunteer Emergency Care Provider (ECP) not providing services for a volunteer firefighting organization:assumed earnings based on the number of volunteer hours of each ECP times the average weekly wage divided by 40 hours, subject to a maximum of 60 hours per week. Volunteer hours include training time, response time, and time spent at the employer’s premise.
  Tip: If the first day of your policy began on or between:
• 07/01/2023 through 06/30/2024: multiply the total number of ECP volunteer hours by $25.85 and include in your report earnings to code 7382-01.
• 07/01/2024 through 06/30/2025: multiply the total number of ECP volunteer hours by $27.10 and include in your report earnings for code 7382-01.

This is referred to as interchange of labor – when employees may perform duties directly related to more than one classification. In such circumstances, an employee’s earnings may be divided between two or more classifications, provided:

1. The classifications are properly assigned to the employer, and the classifications do not prohibit payroll division
   AND
2. The employer maintains payroll records disclosing the actual payroll by classification for each such individual employee. An estimated or percentage allocation of payroll is not permitted. If original payroll records do not disclose the actual payroll applicable to each classification, the entire payroll of the individual employee will be reported in the classification carrying the highest rate and describing all or some of the employee’s duties.

*An individual’s earnings cannot be divided between any other code(s) and codes: 8810, 8811, 8742, 8743, 8744, 8748, or 9012. All earnings for the employee should be reported in the highest-rated code describing all or some of the employee’s duties.

If you have per capita codes on your policy, you’ll get a table to report that information at the end of your policy period. Reporting includes employee name, start/end dates, and number of hours worked during the policy period. An employee who averages 20 hours or less per week and isn’t provided housing, report to code 0908. For employees averaging more than 20 hours per week or provided housing, report to code 0913.

Montana employees are excluded from Montana coverage if they meet all of the following:

• Work solely in North Dakota and
• Are required to be covered in North Dakota, and
• Are covered under a North Dakota Policy.

“Work solely in North Dakota” means the employees do not perform job duties in Montana. Travel that is commuting to and from a job site in North Dakota from a location in Montana doesn’t constitute performing job duties in Montana even if the employer pays for all or a portion of the costs of travel or if the worker is paid for the travel time. If you had employees who met this exclusion go to https://erd.dli.mt.gov/work-comp-regulations/insurance-compliance/extra-territorial, obtain and complete the Employer Verification form and submit with your Payroll Report.