WorkCover base your accident insurance premium on your wage costs, industry and claims history.
Here’s a clear breakdown of how they calculate your premium, what information they need from you and what you can do to manage your costs.
What affects your premium
WorkCover look at three main factors to work out your premium:
- your wages – how much you pay your workers.
- your industry – each industry has a different rate based on overall risk.
- your claims experience – the cost of any injury claims made against your business.
Visit the policy renewal and declaring wages page to find out what to tell WorkCover.
You pay your premium provisionally
This means:
- you pay at the start of the financial year based on your estimated wages, and
- WorkCover adjust it in the next year’s renewal if your actual wages are different.
You’ll also pay GST (goods and services tax) and stamp duty on your premium.
How your industry affects your premium
Each policy has a WorkCover Industry Classification (WIC)
Your WIC is the ‘identity’ of your policy. It:
- is based on the main activity of your business
- groups you with similar employers
- assigns a level of normal injury risk for your industry.
Learn more about how WorkCover use WICs.
How your industry rate works
Your industry rate is the average premium rate for your industry, as assigned by your WIC.
It’s based on information from employers across the industry, including:
- claims history
- injury risk
- workplace safety.
WorkCover use your WIC and its linked industry rate as the starting point for calculating your premium.
Industry rates are set each year and published in the Queensland Government Gazette.
How your claims costs affect your premium
Your claims experience
To work out your premium, WorkCover look at your ‘claims experience’.
This is the cost of claims made against your business.
Helping workers recover and return to work sooner
Getting workers back to work sooner can reduce claim costs.
Lower claim costs may mean a lower premium.
If you’ve held your policy for less than 18 months
If you’ve just started employing workers within the last 18 months, your premium rate is your industry rate.
This means:
your premium = (estimated wages/$100) x industry rate
WorkCover also add GST and stamp duty.
Why WorkCover use the industry rate
It’s your starting point. It:
- reflects the injury risk profile of your industry
- helps ensure fairness and consistency for new employers.
What happens after 18 months
Your policy moves to one of our premium calculation models.
This is because after 18 months, your premium can reflect:
- your claims history
- how injuries are managed in your workplace over time.
If you’ve held your policy for 18 months or more
WorkCover use a premium calculation model to work out how much you should pay.
There are two main models:
- Simplified model – for businesses with $1.5 million or less in wages per year
- Experience-based rating (EBR) – for businesses with more than $1.5 million in wages per year.
WorkCover use the simplified model.
Under this model, WorkCover gives your business a policy rating.
This rating is based on your claims costs from the last financial year.
Your premium may be lower if:
- you have less claims
- you manage claims well
- your claims cost less.
When claims cost less, it costs you less.
How policy ratings work
Each policy rating is linked to a percentage of your industry rate (IR):
- Policy rating 1 – 80% of IR
- Policy rating 2 – 90% of IR
- Policy rating 3 – 100% of IR
- Policy rating 4 – 110% of IR
- Policy rating 5 – 120% of IR
How WorkCover calculate your premium
WorkCover work out your premium by:
- multiplying your wages/$100 by your IR, and
- applying the percentage of IR linked to your policy rating.
If your claims costs increase
- your policy rating may change
- your premium may go up.
The simplified model makes premium changes more predictable
WorkCover has put limits in place to help make premium changes easier to predict and budget for.
Small changes each year
Your policy rating can only move up or down by one level each year (up to 10%).
$500 claim cost protection
The first $500 of your claim costs each year don’t count towards your total claims experience.
This means small or straightforward claims may not affect your premium.
Better ratings, lower premiums
A better policy rating means you pay less.
For example, a rating of 1 means you pay 80% of your industry rate.
No claims, better rating
If you have no claim costs for the year, your rating improves by one level (unless you’re already on the best rating).
To learn more, watch the video Small business: how your WorkCover Queensland premium is calculated.
WorkCover use an experience-based rating (EBR) model.
This model looks at:
- your wages
- your industry rate
- your performance, including past claims costs.
The key differences from the simplified model are that WorkCover looks at:
- more years of claims data
- the size of your business.
How performance is measured
WorkCover base performance on your claims experience.
WorkCover look at four years of claims costs:
- statutory claims costs for the past three years
- common law claim costs for the year before those three years
- the estimated cost of managing those claims through to closure.
WorkCover don’t include some claims costs, such as:
- injuries while travelling between home and work
- injuries during a recess break away from work
- individual claim costs more than $185,000.
EBR rewards strong safety and claims management
You’ll benefit from:
- Lower premiums for better performance – through safe work practices and helping your workers return to work sooner.
- 30% cap on annual premium rate increases – making it easier to plan and budget.
Read the Queensland Government Gazette for more details on how WorkCover work out and apply the EBR.
A different pricing option may apply for some large employers
If your claims experience is better than others in your industry, you may qualify for Large Employer Alternative Pricing (LEAP).
Visit our LEAP page to find out more.
How WorkCover calculate premium if you buy an existing business
If you buy an existing business, the previous employer’s wages and claims history may carry over to your new policy. This is called succession.
Succession doesn’t apply in all cases.
If your business has changed hands, contact us. WorkCover will check if succession applies.
Ways to reduce your premium
There are many practical ways to lower your premium.
Visit the how to reduce your premium page to learn more.
Estimate your premium online
Our premium simulator tool can give you an estimate of your accident insurance premium before it’s formally assessed.
See how key factors may affect your premium
The tool shows how changes to key details – such as your estimated wages and claims costs – may affect your premium rate.
Access the simulator through WorkCover Connect in just a few steps
- Log in to WorkCover Connect
You’ll need your username and password. Forgotten your login details? You can reset them securely online. - Click ‘Insurance’, then ‘Premium simulator’
You’ll find it in the left side menu once you log in.
Your final premium may change
The premium simulator gives you an estimate only.
Your final premium may differ due to:
- final declarations of actual and estimated wages
- changes to your industry rate from the previous year
- your final claims costs as at 30 June.
The simulator can support your planning and budgeting, but it does not replace your final premium assessment.