In Australia, Workers' Compensation is a necessary cost of employing staff, whether full-time, part-time or casual.  Although the schemes in different states can vary slightly, many of the fundamentals remain the same.  One such fundamental, is the declaration of wages that is required in order to gain an appropriate workers' compensation insurance policy for your business.

You may be forgiven for thinking that wages is a cost that is easily determined by looking at your payroll figures. However, wages as outlined by the various states' workers' compensation acts is so much more than simply wages.  In fact, remuneration is probably a better term and besides salary and wages, might incorporate other benefits and entitlements that are made to workers. These may include shift and other allowances, overtime, bonuses, commissions, grossed up fringe benefits, compulsory superannuation guarantee contributions, salary sacrificed superannuation, long service leave payments, termination payments, the value of cash substitutes, payments to working directors and trust distributions to workers in lieu of wages, to name a few. Essentially, any benefit paid (whether cash or non-cash), to or in relation to a worker, is generally to be considered.

Trust distributions to workers in lieu of wages, are one such benefit that is often over looked.   Generally, if a trust distribution occurs as remuneration for work done, and is given wholly or partly, as a substitute for wages, then it is to be included in the overall wages declaration for workers' compensation purposes. However, this does vary from state to state. In some states, remuneration is legislated by law, while in others individual insurers outline their inclusions. Therefore, it is vital that you know where you stand in your particular state, and ensure that you include all relevant workers' payments when making your wages declaration.

It's also important to note that in some states and territories you are not required to have Workers' Compensation Insurance if your total "wages" are below certain thresholds. To learn more about the various workers' compensation schemes in Australia, and to ensure that you are meeting your obligations, speak with your insurer and visit the website of the relevant government agency in your state or territory:

ACT:    www.worksafe.act.gov.au

NSW:    www.workcover.nsw.gov.au

NT:      www.worksafe.nt.gov.au

QLD:   www.workcoverqld.gov.au

SA:     www.workcover.com

TAS:   www.workcover.tas.gov.au

VIC:   www.worksafe.vic.gov.au

WA:   www.workcover.wa.gov.au