Insurance premium calculations
On this page
- Summary of your remuneration
- Industry classifications and rates
- Capped industry premium rates
- Remove your excess (excess buyout option)
- Goods and Services Tax (GST)
- Apply for a review
There are a number of factors used to calculate your WorkCover insurance premium. You can calculate your premium using the premium simulator spreadsheet or your WorkSafe insurance account login (Online Employer Services).
Factors influencing your premium
- 1. Remuneration
Remuneration includes wages, salaries, superannuation and other benefits you pay to your workers. Find out how to work out your remuneration.
Your remuneration also determines if your own claims experience is used in your premium calculation.
If your remuneration is $200,000 or less, your insurance premium is calculated using the rate for your industry.
If your remuneration is over $200,000, then your WorkCover insurance premium is calculated taking into account your claims experience relative to the claims experience of the rest of your industry. If you perform better than your industry average, you will pay less. If you perform worse, you will pay more. Find out how claims influence your premium.
- 2. Industry classification rates
Your industry classification and rate reflects the claims experience of the industry you operate in. The measures used to classify your industry and determine the predominant activity at your workplace include:
- the goods and services you provide
- the activities carried out in your workplace
- what you consider to be the main activity and why
- a list of raw materials, types of equipment, and processes used
- a breakdown of the sales, cost of goods produced, and the cost of labour
- whether or not you own the goods you provide
- whether or not you provide the goods or services internally
- whether or not you provide the goods or services to another business which is associated to your business.
Split your workplace
You can apply to split your workplace on your WorkCover insurance when:
- your workplace is comprised of two or more physically distinct areas
- the main activity carried on in each of those areas is different.
You can't split your workplace if your main business activity includes:
- clerical services
- management services
- administrative services
- sales and marketing services
- warehousing services associated with manufacturing, wholesaling or retailing.
You can find more information industry classifications in the latest Premiums Order at gazette.vic.gov.au.
- 3. Capping
Capping is used to limit the size of premium rate increases for workplaces that have not changed industry classification. A limit of 30% is placed on premium rate increases to protect your business from premium rate fluctuations. If you change industries, this limit is not used.
Capping is on the premium rate for your industry, not on the amount of premium you pay – that's influenced by changes in your remuneration.
Generally your premium rate will not increase by more than 30% if you're continuing normal operations and your classification hasn't changed or workplace hasn't been added.
- 4. Remove your excess (excess buyout option)
If one of your workers is injured at work and your WorkSafe Agent accepts the claim, as their employer you are required to pay for the first 10 days of weekly benefit payments and for the first $692 (2017/18 - indexed annually) of reasonable medical and related like expenses – this is your employer excess.
You can avoid the risk of paying these two employer excesses by selecting the excess buyout option on your 2017/2018 WorkCover Insurance premium. This can be a cost effective option and is paid as an additional 10% on your premium. This means your claims are managed and paid for by your Agent from day one so you have no financial burden for your WorkCover claim. This makes it easier for employers, especially small businesses, by significantly reducing the administrative and financial impact on a business in the early stages of an accepted claim.
The excess buyout option is available to all employers. If you intend to buy out your excess, or you already have the excess buyout option and do not intend to continue with it, you must notify your WorkSafe Agent by 1 August 2017. You can do this by logging into Online Employer Services (OES), update your remuneration and select the excess buyout option.
Alternatively you can contact your WorkSafe Agent and advise them directly. Any change to your excess buyout must be made before 1 August for it to apply to your 2017/18 WorkCover Insurance Premium.
- 5. Goods and Services Tax (GST)
Your WorkCover insurance premium is subject to 10% GST, which is added after the premium is calculated.
The invoices sent to you after you have paid your premium are tax invoices for GST purposes.
Apply for a review
You have the right to request a review of an estimated claim cost if you think it has been calculated using incorrect information – find out what can be reviewed.