Remuneration inclusions and exclusions

What is included and excluded from remuneration?

Remuneration is the gross amount you pay to workers before tax and can include both cash and non-cash payments.

There are a number of items that are included and excluded.

Inclusions

Important: Some payments to workers are not part of your payroll, but they must still be included in your calculation of rateable remuneration.

Note: Goods and Services Tax (GST) paid or payable in relation to payments to contractors is not considered rateable remuneration.

Fringe benefits

WorkSafe uses the Australian Tax Office (ATO) definition of items that are taxable fringe benefits and the ATO fringe benefits tax year – 1 April to 31 March. You only need to declare the taxable value of fringe benefits that applies to Victorian workers.

Calculating your fringe benefits

Most employers' rateable fringe benefits will be determined by adding together the taxable value of Victorian Type 1 and Type 2 fringe benefits then applying a gross up factor – currently 1.9608.

The gross up factor increased each year until 2014/15 and now aligns with the ATO's lower gross up rate.

Year	Gross up rate
2010/11	1.17384
2011/12	1.34768
2012/13	1.52152
2013/14	1.69536
2014/15	1.8868*
2015/16	1.9608
2016/17	1.9608
2017/18	1.8868

* This is a change to the previously notified gross up rate. This rate reflects the Type 2 lower gross up rate for the FBT year ending 31 March 2015 as published by the ATO.

Fringe benefits exemptions

If you have a fringe benefits tax exemption, only the taxable fringe benefits you declare to the ATO are considered rateable for WorkSafe premium purposes. This is the 'aggregate non-exempt amount'.

If you don't have fringe benefits to report to the ATO you'll have no fringe benefits to declare as rateable remuneration to WorkSafe.

Superannuation

Many employers pay a higher amount of superannuation than the law requires. It's necessary to include superannuation in the calculation of your remuneration, as this differs between employers.

Superannuation contributions include any contributions made by an employer to:

Commissions

A commission is a sum of money that is paid to a worker upon completion of a task, usually the task of selling a certain amount of goods or services. It can be paid as a percentage of the sale or as a flat dollar amount based on sales volume. This includes commissions paid to insurance or part-time canvassers or collectors.

Payroll tax

If you're also registered for payroll tax, there are a number of differences between WorkSafe's definition of 'remuneration' and 'wages' used for payroll tax purposes. More information is available from the State Revenue Office.

Workers in other states or territories

If you have workers that work in more than one state or territory the interstate workers guideline can provide you with advice.

Exclusions

These items are exempt when you calculate your rateable remuneration:

Motor vehicle allowance

A motor vehicle allowance is paid or payable to a worker for the use of their own vehicle for work purposes:

After you've calculated this as a dollar amount, subtract it from the amount of allowance paid to the worker. If there is a remainder it's considered to be rateable remuneration and should be included in salaries and wages.

Accommodation allowance

If an accommodation allowance extends beyond 30 continuous days, a worker must also be maintaining a personal domestic dwelling for their own use in order for the allowance to retain the exemption:

Any amount paid per night over the exempt rate is considered to be rateable remuneration and should be included in your determination of salaries and wages.

Apprentices or trainees

Some apprentice remuneration is exempt for WorkCover insurance purposes. Learn more about apprentices and trainees.