Workers Compensation

Workers Compensation

Who is Covered

• Sole Trader – Only Employees – not policy holder

• Partnership – Only Employees – not policy holder

• Company – All employees including directors

When is a Policy Required

• When you employ someone (excluding subcontractor)

• Where wages are greater than $7500 p.a.

Insurers

• Must be registered by Workcover

• No difference in premiums

• Ancillary benefits may vary– Courses– CPD Points

PremiumBased on Total Wages• salary / wages• overtime, shift and other allowances• over-award payments• bonuses, commissions• payments to working directors (including directors’ fees)• payments to pieceworkers (who are not sub-contractors)• payments for sick leave, public holidays and the associated leave

loadings• value of any substitutes for cash• employer superannuation contributions (including the superannuation

guarantee levy)• grossed-up value of fringe benefits

How is Premium Calculated

• The industry in which the employer operates • The amount of wages the employer pays to its

workers• The costs of any claims made by their workers

(for employers with a basic tariff premium greater than $30,000)

• The dust diseases levy• Wages paid to apprentices.

WIC Rates 2013 - 2014

Premium Calculation

• Where there are multiple descriptions the highest rate will apply to the premium

Employee or Contractor

An employee is more likely to:• be subject to direction from the employer as

to the work to be performed and the time and manner in which it is performed;

• be required to actually carry out the work;• be paid on a time basis;• have tools and materials supplied by the

employer;• work exclusively for a single employer

Employee or Contractor

A contractor is more likely to: • be engaged to carry out a particular task using his

or her own skill and judgement;• employ others, delegate or sub-let work to another;• be paid on the basis of a quotation for the job;• supply his or her own tools and materials;• carry on an independent business in his or her own

name or under a business or firm name;• be affected by PAYG tax arrangements.

Increase in Premiums

• Medium & Large Organisations premiums will increase where claims are made.

• This applies to organisations where the policy is > $30 000

Calculation of Premium

• On application you will estimate the wages

• Policy premium will be based on this

• Reviewed and adjustments are made at policy renewal time

Certificate of Currency

• Proof that you hold a current policy

• You should request a copy from subcontractors

Excecise

• Calculate Basic Tariff for a Residential Building Company– Admin Staff $35 000– Supervisor $80 000– Carpenter $65 000– Labourer $45 000

Exercise

• Calculate Basic Tariff for a Residential Building Company - – Admin Staff $35 000– Supervisor $80 000– Carpenter $65 000– Labourer $45 000– Total $225 000 x 5.040% = $11 340