Remuneration - Frequently Asked Questions
Are apprentices and trainees exempt from rateable remuneration?
Is the declaration of rateable remuneration based on cash accounting or accrual?
What happens if I don't supply my remuneration details by the due date?
What happens to my premium when my remuneration creeps over the $200,000 threshold?
What if I have workers in Victoria and other states or overseas?
What is included in rateable remuneration?
What type of employees should I include in my remuneration estimate?
Why are superannuation and other salary components included in rateable remuneration?
I'm not sure what to include as remuneration – where can I get help?
What is included in rateable remuneration?
Your Workplace Injury Insurance premium is determined, in part, by the size of your remuneration. This is made up of the wages, salaries and certain other benefits you pay to your workers.
For insurance purposes, remuneration is more than just payroll and includes:
- Gross wages & salaries (includes overtime and all pay loadings)
- Bonuses and commissions
- Allowances (includes clothing, meals, travel etc)
- Items included as part of an employment package and any fringe benefits within the meaning of the Fringe Benefits Tax Assessment Act 1986; and
- Any superannuation benefit paid by an employer in respect of a worker.
For more detailed information about what to include as remuneration, refer to the checklist. You can also contact your agent for help.
It is important to identify your remuneration accurately. You need to know what should, or should not, be included as there are penalties for underestimating or understating your remuneration. If you think you may have done this, contact your WorkSafe agent as soon as possible.
What type of employees should I include in my remuneration estimate?
All employees are included and if you hire a person to perform work on a contract they may either be counted as an employee or 'deemed' to be one. Any person deemed in this way is covered for workers' compensation purposes and you must include all payments for the labour of this person in your rateable remuneration.
Whether or not a contractor is deemed to be a worker depends on the particular circumstances and if you are unsure please contact your WorkSafe agent.
Why are superannuation and other salary components included in rateable remuneration?
There are a few reasons for this. Benefits paid to workers are more than just wages, including medical costs and lump sum payments for impairment.
To exclude superannuation payments would provide a strong incentive to pay workers large amounts of superannuation rather than wages as a means of reducing premium costs.
Also, as the WorkSafe still needs to collect enough premium to fund the scheme, a shrinking remuneration base would just lead to higher industry rates. Industry rates would not rise evenly though, as some employers may be better able to shift salary into superannuation, meaning that some employers would cross-subsidise others based just on an ability to minimise remuneration.
To encourage premium minimisation through anything other than workplace safety runs against our efforts to make premiums fairer.
Will there still be an estimation component if wages are expected to increase? What should I do if I think my remuneration has changed?
Yes. You must estimate the total remuneration for the coming year.
If, at any time, you become aware that:
- what you expect to pay in remuneration is 20 per cent above your current estimate, or
- what you have actually paid in remuneration at any time prior to 30 April is greater than your current estimate
You must provide your WorkSafe agent with a revised estimate within 28 days. If you fail to do so, you may be penalised up to 100% of the premium difference.
You may also advise your agent if your actual remuneration during the policy period will be less than your latest estimate of remuneration. Your future premium instalments can then be adjusted in line with the reduced remuneration. However, you need to be sure that your expectations of reduced remuneration are realistic.
Is the declaration of rateable remuneration based on cash accounting or accrual?
Remuneration is calculated on an accrual accounting basis, and includes remuneration paid or payable in a financial year. Rateable remuneration totals the value of the services accrued in the policy year regardless of whether they were paid in that year.
Are apprentices and trainees exempt from rateable remuneration?
Yes, some of this remuneration is exempt but it is subject to the training being an approved training scheme and to certain qualifications and restrictions. Note that from 1 July 2005, changes come into effect which limit the amount of trainee remuneration that can be exempt. It is important that you are aware of these before deciding that your remuneration is exempt. You can read more about this in the apprentices/trainees section or in the booklet Your WorkSafe Injury Insurance. You can also contact your WorkSafe agent for help.
What happens to my premium when my remuneration creeps over the $200,000 threshold?
If this happens, your premium will be recalculated as a large employer, which is more heavily based on your own claims experience. You should talk to your agent about how this may affect you.
What if I have workers in Victoria and other states or overseas?
New legislation effective from 1 July 2005 clarifies who is a Victorian worker for the purposes of declaring remuneration for the calculation of insurance premium. For details see the booklet Your WorkSafe Injury Insurance. You can also read about the tests used to determine which state a worker is connected to (including information about workers who work on ships) by downloading the following document determining a worker's state of connection.
- download and view New rules for workers that work interstate or overseas (PDF 28kb)
What if I have workers who work on ships? How do I know which state I should declare their remuneration in?
Workers on ships should be treated in the same way as other workers. However, if no State or no one State can be identified by using the state of connection tests (outlined in the document referred to above), a worker's employment is, while on a ship, connected with the State in which the ship is registered or, where the ship is registered in multiple States, the State in which the ship was most recently registered.
What happens if I don't supply my remuneration details by the due date?
If you don't tell us what you paid in remuneration for by the due date of 1 August we will use our estimate of your remuneration, which is 20% more that the last remuneration figure you supplied. We do this because we need to finalise the premium calculation for all employers in the state.
You can change this figure later on, but it could cost you higher premiums in the short term, plus result in more hassle with additional paperwork.
Who is my agent?
If you don't know who your agent is, refer to the letter which was sent to you in June, which details the contact numbers for your agent.
Otherwise, you can email the WorkSafe at info@worksafe.vic.gov.au or call the advisory service on 1800 136 089.
I'm not sure what to include as remuneration – where can I get help?
You can refer to the booklet that was mailed in June, which contains a checklist to help you determine what should, and should not, be included as remuneration. Remember that remuneration is more than just salaries and wages for insurance purposes, so it's important that the correct amount is recorded.
Download and view the booklets:
- Your WorkSafe Injury Insurance 2009/10 - A guide for small employers
- Your WorkSafe Injury Insurance 2009/10 - A guide for medium to large employers
If you are having trouble completing the form, please talk to your WorkSafe agent.
