Workers' Compensation in WA: A Guide to Renumeration

If you're an employer in Western Australia, you’re legally required to hold Workers’ Compensation Insurance to protect your employees from injury or illness that occurs as a result of their employment.

But when it comes time to arrange or renew your policy, one question often causes confusion:

“What do I need to include as remuneration when declaring wages to my insurer?”

Here's a simple guide based on WorkCover WA’s rules, so you don’t end up under-insuring (and facing penalties) or over-insuring (and paying too much).

Why Understanding “Remuneration” Matters

When you apply for or renew a Workers’ Compensation policy, the insurer will ask you to declare your estimated remuneration for the upcoming period.

This figure is used to:

• Calculate your insurance premium

• Determine claim costs and policy adjustments

• Reconcile actual wages at year-end to finalise your policy

▸ Incorrect wage declarations can lead to underpayment of premiums, financial penalties, or rejected claims — especially in the event of an audit by WorkCover WA or your insurer.

What Counts as Remuneration in WA?

In WA, “remuneration” includes any form of payment or allowance made to or on behalf of a worker, whether it’s cash, non-cash or in-kind benefit.

Here’s what's typically included:

✅ Inclusions

• Wages and salaries (including overtime and bonuses)

• Commissions and piecework payments

• Allowances (e.g., site, travel, tool, uniform)

• Fringe benefits (e.g., motor vehicle use)

• Superannuation paid in excess of the standard super guarantee

• Directors’ fees

• Payments to contractors or sub-contractors who meet the definition of a 'worker' under the Act

• Honorariums paid to working directors or committee members

• Salary sacrifice arrangements

• Weekly workers’ compensation payments (while the worker is receiving them during a claim)

What Does Not Count as Remuneration?

There are some specific exclusions to be aware of:

⛔ Exclusions

• Compulsory superannuation (i.e. statutory SG contributions)

• Reimbursements of employee expenses (e.g., fuel costs reimbursed on receipts)

• Termination payments (e.g., redundancy, leave payouts)

• GST components of contractors’ invoices

• Dividends paid to shareholders that aren’t working directors or employees

What About Contractors and Subcontractors?

If you engage contractors, you’ll need to determine if they meet the definition of a ‘worker’ under WA workers compensation law.

Even if you pay them through an ABN and consider them self-employed, if they:

• Work mostly for you

• Are paid on a regular basis

• Don’t delegate their work to others

• Use your tools or equipment

...then they might be classed as a “worker”, and you’re required to include those payments in your remuneration figure.

❗ Tip: If in doubt, check with your broker or your insurer. Failing to declare contractor wages correctly can open you up to significant risk.

When Do I Declare This?

• At policy inception: You estimate gross remuneration for the upcoming year

• At renewal or audit time: You declare actual wages paid so your premium can be adjusted accordingly

Accurate wage declarations can lead to a refund if you’ve overpaid, or a top-up bill if you’ve under-declared.

 In Summary

Included in Remuneration?	Yes/No
Wages, salaries, bonuses	✅ Yes
Overtime & allowances	✅ Yes
Superannuation (above SG)	✅ Yes
Statutory SG super	❌ No
Fringe benefits (e.g., cars)	✅ Yes
Reimbursed expenses	❌ No
Contractor payments (maybe)	⚠️ Depends on status

Need help reviewing what to include?

We’re here to help you:

• Determine what counts and what doesn’t

• Review your policy against WorkCover WA requirements

• Avoid surprises at audit time