All businesses must declare their wages to their insurance agent.
This is to help ensure you're paying the correct premium and that everyone is paying their fair share into the scheme.
If you are a small employer, you are required to lodge a declaration at the end of your workers compensation insurance policy period.
If you are an experience-rated employer, you must declare your wages at the beginning and end of each policy period.
You will do this by filling out the wages declaration form supplied by your insurance agent.
Where a payment to a worker (including deemed workers) is made in lieu of wages (regardless of the terminology used to describe that payment), the payment is counted as wages.
Apprentice wages entitle you to a premium reduction so they need to be declared separately to those of other workers.
Calculating your wages is done in much the same way as you do your payroll tax.
Wages can include:
- overtime, shift and other allowances
- over award payments
- bonuses, commissions
- payments to working directors (including directors' fees)
- payments to pieceworkers
- payments for sick leave, public holidays and the associated leave loadings
- value of any substitutes for cash
- employer paid or payable superannuation contributions (including the superannuation guarantee levy)
- grossed up value of fringe benefits (allowances subject to fringe benefits tax are counted at the grossed up value, that is the value of the benefit multiplied by the relevant Australian Tax Office fringe benefit formula).
- long service leave payments (including lump sum payments instead of long service leave)
- termination payments (lump sum payments in respect of annual leave, long service leave, sick leave and related leave loadings)
- trust distributions to workers where the distribution is in lieu of wages for work done for the trust.
Wages does not include:
- payments to non working directors
- compensation payments under the Workers Compensation Act 1987
- any GST component in a payment to a worker.
Our wages definition manual provides a comprehensive guide of the wages that should be taken into account when calculating premiums.
Non-profit organisations, public benevolent institutions and charities should continue to declare worker benefits that aren't subject to fringe benefits tax at the net value. Once the worker benefits exceed the Australian Tax Office fringe benefit threshold, the employer must declare the benefit at the grossed-up value.