Overview of the Premium Calculation in NSW

Calculating premiums 

An employer's premium is calculated twice during each policy period. The initial premium (called the premium estimate) is calculated at the beginning of the policy period. It is based on an estimate of wages that an employer is likely to pay during the policy period.

The final premium (called the hindsight premium) is calculated at the end of the policy period. It is calculated using the actual amount of wages paid by the employer during the policy period.

If the hindsight premium is higher than the initial premium, the employer will need to pay the difference to their Scheme Agent. If the hindsight premium is lower than the initial premium, the employer’s Scheme Agent will repay or credit the employer any overpayment.

Basic tariff premium

An employer’s basic tariff premium is calculated by multiplying their wages by the WorkCover Industry Classification (WIC) rate of the applicable industry class. Where the employer has a multi-tariff policy, this formula is repeated for each applicable industry class, and the outcomes added together to produce the total basic tariff premium.

For a small number of industry classes, basic tariff premium rates are expressed as a per capita rate (e.g. professional sport) or a per plate rate (egg. taxis and hire cars).

The minimum premium is $175 even if the calculation produces a lower amount.

Estimating premiums

Employers can easily get an estimate of their workers compensation premium using Work Cover’s online premium estimator.

The premium estimator allows a new business, or an existing business looking to diversify or expand, to calculate what happens to their workers compensation premiums if they:

1. Change staffing levels or total wages

2. Add or change business activities

3. Employ apprentices, or

4. Have a claim

By selecting the business activity that best describes the business from the list, employers can gain assurance they are using the correct WorkCover Industry Classification.

Employers can also vary their details to compare the impact of different business scenarios and print or save a copy of the premium estimate.

Employer categories

Small employers

Have a basic tariff premium of $10,000 or less or annual wages less than or equal to $300,000. Small employers do not have their premiums experience adjusted. See more information for small employers.

Medium employers

Have a basic tariff premium of more than $10,000 and less than or equal to $500,000 and annual wages of more than $300,000. Medium employers have their premiums experience adjusted.

Large employers

Have a basic tariff premium of more than $500,000. Large employers have their premiums experience adjusted. 

An employer’s category will be assessed for the experience adjustment threshold at both the start and end of the policy year.