As a business owner you are required to declare the amount of wages that you have paid to your workers compensation insurer. This is to make sure that you are paying the correct amount for your premium as well as ensuring that everyone is paying their fair share into the scheme.
If you are a small employer, ie you have a basic tariff premium of $30,000 or less, your declaration is to be provided at the end of your insurance period. If you are a medium to large employer, ie you are a business with an average performance premium that is greater than $30,000, your declaration is to be provided at the renewal date of your policy.
Calculating your wages is similar to calculating your payroll tax. You can obtain a declaration form from your insurer or if you use icare Workers Insurance, you can obtain the form from here.
When calculating your wages for declaration, the following is a list of what wages should be included:
- overtime, shift and other allowances
- over award payments
- bonuses, commissions
- payments to working directors (including directors’ fees)
- payments to pieceworkers
- payments for sick leave, public holidays and the associated leave loadings
- value of any substitutes for wages
- employer paid or payable superannuation contributions (including the superannuation guarantee levy)
- grossed up value of fringe benefits (allowances subject to fringe benefits tax are counted at the grossed up value, that is the value of the benefit multiplied by the ATO fringe benefit formula)
- long service leave payments (including lump sum payments instead of long service leave)
- termination payments (lump sum payments in respect of annual leave, long service leave, sick leave and related leave loadings)
- trust distributions to workers where the distribution is in lieu of wages for work done for the trust
The following is a list of what wages does not include:
- payments to non working directors
- compensation payments under the Workers Compensation Act 1987
- any GST component in a payment to a worker
If you have any questions regarding the calculation of your wages or any concerns about what to declare, please give us a call.