Workers Compensation
Cover for work-related injury, run as a separate scheme with its own premium basis in every state and territory.
Workflow
- 01Policy and Registration
- 02Wage Declaration
- 03Premium Calculation
- 04Claim Lodgement
- 05Return to Work
- 06Reconciliation
If you change this
It implies 13 topics across 2 modules, including Financial Accounting which you might not expect.
See the path ahead →Why it matters
Premium is a function of declared wages and claims history, which makes it one of the few payroll outputs where data quality has a direct and compounding financial consequence.
- The scheme differs by jurisdiction: Who underwrites it, how premium is set and how claims are managed are all state matters.
- The wage definition is its own: Different from payroll tax, different from superannuation, and different from gross pay.
- Classification drives rate: Industry classification determines the rate, and a wrong or stale classification is paid for every year until it is corrected.
- Claims feed premium: Return-to-work performance changes what the organisation pays, sometimes for years.
The workflow
- 01
Policy and registration
Cover placed in each jurisdiction where people work, under that jurisdiction's scheme.
- 02
Wage declaration
Declared on the scheme's own definition, including the components payroll does not usually group together.
- 03
Premium calculation
Assessed on declared wages, industry classification and claims experience.
- 04
Claim lodgement
Injury reported and lodged within the jurisdiction's timeframe.
- 05
Return to work
Managed actively, with suitable duties and the obligations the scheme imposes on the employer.
- 06
Reconciliation
Actual wages reconciled against declared at year end, and premium adjusted.
Check the industry classification. It is set once, usually at registration, and then never revisited — and a classification that no longer describes what the organisation does is paid for at the wrong rate every single year.
What you need in place
- Cover in every jurisdiction where people work: Including employees working remotely across a border.
- A wage mapping for this scheme: Its own mapping, not a reuse of the payroll tax one.
- Current industry classification: Reviewed when operations change.
- Injury reporting inside the timeframe: Late lodgement is a scheme breach in several jurisdictions.
- Return-to-work capability: Suitable duties identified in advance, because they cannot be invented during a claim.
- Claims and premium visibility: Held by someone who can act on the trend, not filed with the insurer.
Questions to ask
01Coverage
Do we hold cover in every jurisdiction where someone works?
Remote and cross-border workers are where the gaps are.
02Classification
When was our industry classification last reviewed?
Usually at registration, and usually wrong by now.
03Wage basis
Which wage components are declarable under this scheme?
It is a different list from payroll tax and superannuation.
04Lodgement
How quickly is an injury lodged?
Timeframes are set by the scheme and missing them has consequences.
05Return to work
Do we have suitable duties identified before we need them?
Improvised duties extend claims and premium.
06Trend
Who watches claims cost and premium impact?
If it is the insurer, nobody inside the organisation is acting on it.
Metrics and KPIs to track
Premium against declared wages
By jurisdiction, trended.
Claims frequency and cost
Per hundred employees, by cause.
Lost time injury frequency
Against sector benchmark.
Return-to-work duration
Days lost per claim, and the share returning to full duties.
Declaration accuracy
Year-end reconciliation adjustment against declared.
Lodgement timeliness
Claims lodged within the scheme's timeframe.