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Calculating premium

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Your WorkCover accident insurance policy premium is calculated using a wages multiplied by rate formula, called experience based rating. You pay your premium provisionally—that is, you pay for your insurance at the beginning of a period, and adjust it at the end.

Your rate is influenced by a number of factors, including:

  • your claims performance
  • your industry’s claims performance
  • your size relative to your industry.

Using your estimated wages for the current financial year, we calculate your provisional premium. If you’re renewing your policy, we use your actual wages for the past financial year and calculate your actual premium.

When you renew your policy, we subtract the provisional premium you’ve already paid for the past financial year from your actual premium for that year. Then we add your provisional premium for the current financial year. GST and Stamp Duty are applied to all policies to reach your final premium amount.

Experience based rating and how we use it to calculate your premium.

Declaring wages and renewing your policy.

Examples

Industrial Industries Pty Ltd are renewing their policy in July this year.

In the last financial year, they estimated they would pay $800 000 in wages. Their premium rate was 2.000. They now know they paid $1 million in actual wages for the past year. In the current year, they estimate they will pay $1.1 million in wages. Their premium rate for the current year is 2.004.

Their premium will be calculated like this:

  • prior actual premium = $20 000
  • subtract prior provisional premium = $16 000
  • add current provisional premium = $22 044
  • subtotal = $26 044 (excluding taxes).

Mary’s Bookkeeping Pty Ltd are renewing their policy. In the last financial year, they estimated they would pay $200 000 in wages. Their premium rate was 0.500. They’ve now revised this amount to $150 000 in actual wages for that past year.

In the current year, they estimate they will pay $150 000 in wages. Their premium rate for the current year is 0.600.

Their premium will be calculated like this:

  • Prior actual premium = $750
  • subtract prior provisional premium = $1 000
  • add current provisional premium = $900
  • subtotal = $650 (excluding taxes).
Last updated
09 April 2014

Small business

You can find information specifically for small businesses, aimed to help and educate you on WorkCover matters, on our dedicated page.