Understand how your remuneration is calculated, what's included and what's exempted.
What is remuneration?
Remuneration includes wages, salaries, superannuation, and other benefits such as cash and non-cash payments you pay your workers before tax. Certain types of remuneration are included in the calculation of your insurance premium. This is known as your rateable remuneration.
How remuneration affects your premium
If your annual rateable remuneration is $200,000 or less, we calculate your premium using remuneration and the standard rate for your industry.
If your annual rateable remuneration is over $200,000, we calculate your premium by taking into account how many WorkCover claims have been lodged against your business. If you perform better than your industry’s average, your premium will be lower. If you perform worse, it’ll be higher.
Managing and updating your rateable remuneration
At the start of every financial year, we estimate your rateable remuneration and use it to help calculate your WorkCover premium. If this estimate is more than your expected rateable remuneration, you can update it at any time by logging in to your Online Employer Services account. If this estimate is less than your expected rateable remuneration by 20% or more, you must update it as soon as possible. We’ll recalculate your premium and you can pay it on the spot.
At the end of the year, you'll need to let your WorkSafe agent know what your actual annual rateable remuneration was (this is known as declaring or certifying your remuneration) by the due date on your notice. If you don't, you may be required to pay a penalty. You can declare your rateable remuneration by logging in to your Online Employer Services account and completing the 'Declaration of rateable remuneration' form.
Benefits of managing your rateable remuneration
Managing your rateable remuneration helps you:
stay in control of your premium repayments
get more accurate and consistent premium repayments
avoid any surprises or penalties
Your premium payments for WorkCover insurance also help us reach our goal of making Victoria one of the safest places in the world to work.
What's included in rateable remuneration
Use this information to estimate and declare your rateable remuneration. This applies to Victorian workers only.
Working parents of children who were born or adopted on or after 1 January 2011 are entitled to paid parental leave from the Paid Parental Leave Scheme. This is government-funded paid parental leave, and is not included in remuneration.
If the worker receives any payments on top of the Paid Parental Leave Scheme entitlement, these payments are included in remuneration.
All other maternity and parental leave payments are also included in remuneration.
A motor vehicle allowance is money you pay a worker to compensate them for using their personal vehicle for business purposes. To calculate what portion of this allowance is not included in your remuneration (also known as the exempt amount), you multiply the number of business kilometres by the applicable rate for the period.
2022/23 the exempt rate is $0.72 per business km
2021/22 the exempt rate is $0.72 per business km
2020/21 the exempt rate is $0.68 per business km
2019/20 the exempt rate is $0.68 per business km
2018/19 the exempt rate is $0.66 per business km
2017/18 the exempt rate is $0.66 per business km
After you've calculated the exempt amount, you subtract it from how much you paid your worker. If the amount you paid your worker is greater than the exempt amount, then the difference is included in remuneration. You can record this in section A of your declaration of rateable remuneration.
If you're paying or reimbursing a worker for living away from home (for example, paying for things such as accommodation, meals, and incidental expenses such as telephone costs), and that payment is subject to fringe benefits tax, then it's included in remuneration. This is usually paid when the worker has relocated for work purposes. You can record this in section A of your declaration of rateable remuneration.
If the worker is temporarily away from home for work purposes, this is considered accommodation or travel allowance.
If you're paying a worker an accommodation allowance for more than 30 continuous days, the worker must maintain a personal domestic dwelling for their own use in order for the below exempt rate to apply.
2022/23 the exempt rate is $289.15 per night
2020/21 the exempt rate is $283.45 per night
2019/20 the exempt rate is $280.75 per night
2018/19 the exempt rate is $278.05 per night
2017/18 the exempt rate is $266.70 per night
Any amount paid per night over the exempt rate is included in your remuneration. You can record this in section A of your declaration of rateable remuneration.
Any allowances other than motor vehicle, living away from home, overnight accommodation or travel allowance are included in your remuneration. Record these in section A of your declaration of rateable remuneration.
Reimbursements are not included in remuneration if they meet the following:
The worker is being reimbursed for an expense that they already incurred. Or, if the payment is being made in advance, the worker provided you with a receipt of the expense and refunded any excess from the advance payment.
The expense was incurred by the worker in the course of your business.
The precise amount is reimbursed and nothing more.
If the above does not apply to a reimbursement you made, contact your agent for advice.
Payments made to a worker when their employment is terminated (for example, payments in lieu of notice, accrued holiday pay, long service leave or severance/redundancy pay) are not included in remuneration.
However, if the worker resigns and works their 'notice' period, the payment for this period is included in remuneration. You can record these in section E of your declaration of rateable remuneration.
This obligation exists for the entire duration of the worker's jury service, regardless of its length, and applies no matter the size of the employer's business. You can record this in section E of your declaration of rateable remuneration.
Any payments made by a personal services entity to an individual performing the services are included in remuneration, provided they meet the definition of remuneration either under the common law or under another provision of the Act. For more information, refer to the Contractor guideline flowchart.
If a payment is being made to a business owner who is also a worker for that business, this may be included in remuneration depending on the reason for that payment.
If they're being paid only because they're a worker (and not because they're a shareholder), then this is included in remuneration.
If they're being paid a profit distribution (money left over after deducting all expenses), then it doesn't matter if they're both a business owner and a worker for that business – that payment is not included in remuneration.
If the business has made a loan to someone who is also a worker of the business and the loan is considered income for that person for income tax purposes, it's not included in remuneration. If the loan is considered a loan benefit under fringe benefits tax legislation, the taxable value (calculated using the formula for Type 2 Benefit) is included in remuneration. Contact the ATO for more information on income tax and fringe benefits tax.
If the loan repayment is offset against the beneficiary's or shareholder's remuneration, the offset amount is included in remuneration. If the loan repayment is offset against trust distributions to the beneficiary or dividends to the shareholder, the offset amount is not included in remuneration.
Include any rateable amount in section E of your declaration of rateable remuneration.
If you have an arrangement where an employment agency contracts a service provider (whether an individual or company) to arrange for services to be provided to you, then fees you pay to the employment agency are not included in remuneration.
This is in section E of your declaration of rateable remuneration.
For more information and assistance contact your WorkSafe agent or the WorkSafe Advisory service.
WorkSafe Advisory Service
WorkSafe's advisory service is available between 7:30am and 6:30pm Monday to Friday. If you need more support, you can also contact WorkSafe using the Translating and Interpreting Service (TIS National) or the National Relay Service.