Workers Compensation

In NSW, it is compulsory to have a workers compensation policy if:

• You engage workers or contractors deemed to be workers and pay, or expect to pay, more than $7,500 a year in wages, or
• You engage apprentices or trainees, or you are a member of a Group for workers compensation purposes.

For more details on the status of workers for workers compensation insurance, please visit the WorkCover NSW website.

In NSW, a worker for workers compensation purposes is: ‘a person who has entered into or works under a contract of service or a training contract with an employer (whether by way of manual labour, clerical work or otherwise, and whether the contract is expressed or implied, and whether the contract is oral or in writing)'.

However, as many employment relationships are not standard, some people are also classified as ‘deemed’ workers. To assist you to clarify whether a person is a worker for workers compensation purposes, WorkCover NSW has designed a self-assessment tool. This tool is available to all employers and is designed to identify the worker status of the person(s) through a series of simple questions.

In NSW, the following factors are used to calculate workers compensation insurance premiums:

• Industry in which the employer operates;
• Annual wages paid to employees; and
• Claims and wages costs over 3 years (if your premium is greater than $30,000)

If you are a small employer, i.e. if you pay basic tariff premium less than or equal to $30,000, your premium will not be impacted by the costs of your workers compensation claims.

Small employers who do not have any claims will receive 10% discount off their premium. Any small employer that has a claim, will retain the 10% discount if the injured worker is returned to pre injury employment within 13 weeks.

For detail on calculation formulas, please refer to the NSW WorkCover website and view the Insurance Premiums Order for the applicable policy term.