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Workcover Insurance

What is Workcover Insurance?

Workcover Insurance premiums provide insurance cover for the costs of benefits if your workers sustain a work related injury or illness.

Benefits include: weekly payments, medical treatment/rehabilitation costs, legal costs and lump sum payments if there is a serious injury.

Workcover and Companies:

Directors and employees that receive salary and wages are workers and are covered for workcover purposes. You must register for Workcover if your remuneration (salary and wages) is over $7500.

Workcover and Sole trader/Partnerships:

If you are a sole trader or partnership you are not an employee and cannot be covered by Workcover.

Buying out your excess:

If one of your workers is injured at work, generally you are responsible for the first 10 days of weekly benefit payments and the first $667 (2015/16) of reasonable medical expenses.

However, you can remove this amount, known as the employer excess by taking up the buy-out option and paying an additional 10% on your premium.

Premium calculations:

Small employers – If your rateable remuneration is $200,000 or less your premium is calculated using the industry rate.

Larger employers – if your rateable remuneration is $200,000 or over then the premium is calculated on the rate of your industry, and any recent workers’ compensation claims.

Rateable remuneration:

Rateable remuneration can include both cash and non cash items.

Cash items include:

  • Salaries and wages
  • Allowances
  • Annual leave and LSL payments
  • Bonuses
  • Director’s fees
  • Fees for work performed
  • Superannuation
  • Payments to deemed Contractors. Normally a three part test will determine if a contractor is deemed to be an employee. They are:

1)      The provision of materials or equipment is not the principal object of the arrangement,

2)      At least 80% of the work is performed by the same individual, and,

3)      At least 80% of the contractors overall services income is earned from the hirer.

Please see for more information.

Items not included in Rateable remuneration:

  • Some remuneration paid to apprentices and trainees
  • Dividends to shareholders
  • Trust distributions
  • Partner drawings and
  • Termination payments – such as payments in lieu of notice, accrued holiday pay.

There is currently a lot of activity in the Workcover compliance area. If you would like to discuss your Workcover obligations further or need assistance with applying for Workcover please give us a call on (03) 9370 1989.