September 22, 2025

What you need to know about your clients’ final audits

As an agent, helping your clients understand the workers’ compensation process is essential because it simplifies their experience while building trust and confidence in your services. One aspect that often raises questions is the final audit. Here’s what you and your clients need to know about final audits with Texas Mutual.

What is a final audit?

A final audit is a review of a policyholder’s payroll and business operations at the end of their policy. This step is a normal part of the workers’ comp process that helps ensure the policyholder is only paying for the coverage they need. It ensures that Texas Mutual has charged them the right amount for their workers’ comp insurance.

The main reason for conducting a final audit is accuracy. When a policy is issued, the premium is based on estimated payroll and business operations. During the policy period, business activities may change—staffing levels adjust, operations expand or decrease and job duties shift.

Once the policy period ends or if the policy is cancelled, Texas Mutual conducts a final audit to compare estimated figures with actual payroll information and business activities. This allows us to issue a final invoice or refund based on your client’s true risk exposures.

Types of audits

At Texas Mutual, we conduct final audits through phone, online, in-person and virtual appointments. The audit method we select for your client is determined by several factors, such as their premium size and type of business. In some cases, our team is able to perform the audit based on information the policyholder already provided during the policy period, so they won’t have any extra steps.

TimeTap

We use an application called TimeTap to help schedule and track final audit appointments. During the audit process, your client will receive emails from TimeTap on behalf of Texas Mutual to schedule, confirm or reschedule an audit appointment.

The audit process

Step 1: Policyholder notification

After a policy expires or is cancelled, Texas Mutual will notify the policyholder about the final audit. This notification may arrive by email, mail or phone call. The notice will include instructions for completing the audit based on the type of audit assigned to them.

The policyholder will need to choose one person to be the final audit contact at the company. Once the audit begins, they will be the only person who can access the audit through their Texas Mutual Online (TMO) account.

Step 2: Policyholder gathers and submits information

To help us verify payroll and business operations, your client will be asked to provide information and supporting documents, such as:

• The business’ Federal Employer Identification Number (FEIN)
• A brief description of business operations (1-2 paragraphs)
• Payroll documents for each covered entity
• Subcontractor or contractor labor records, if applicable
• Records for additional named insureds, if applicable

The auditor may request additional documents depending on the type of business, such as profit and loss/income statements, customer/subcontractor contracts and IRS forms.

The policyholder’s audit contact can upload their documents ahead of time through their TMO account. This gives the Texas Mutual auditor advanced time to review the documents and will speed up the appointment time. Once the documents are submitted, the contact will receive a confirmation email sharing they were successfully sent to the auditor.

Step 3: Final audit appointment

Our team of friendly, knowledgeable auditors will guide the policyholder through every step of the final audit process to make it as simple and easy as possible. We recommend the policyholder keep their documents on hand during the audit in case there are any questions during the review.

Step 4: Processing and results

After reviewing the documents and information provided during the appointment, the auditor will finalize the audit results. Then, a Final Audit Summary will be sent to the policyholder, detailing the billing adjustment for the final audit (not a bill), as well as a detailed breakdown of the payroll exposure and the actual final calculated premium charged.

How you can support the process

We encourage you to help your client feel more comfortable with the final audit process by letting them know it’s a standard part of the workers’ comp process and not a penalty. Advise them to maintain clear payroll records and keep contractor certificates up to date to make their audit easier.

Final audits are an important, routine part of workers’ comp insurance. By helping your clients understand what’s required, you can make the process smoother and highlight your commitment to their success. For more information, review our final audit FAQs or contact us at (800) 859-5995 or finalaudit@texasmutual.com. We’re here to help make the process as smooth as possible.