When renewing a WorkCover Queensland policy, many business owners simply enter the wages figure shown in their accounting reports. However, the amount required for a WorkCover wage declaration may not be identical to the ordinary wages expense recorded in a profit and loss statement.

Employee wages, superannuation, bonuses, allowances, apprentice wages and payments to certain individual contractors may all need to be considered.

WorkCover premiums are generally calculated using declared wages, the employer’s industry rate and other relevant factors. Businesses are usually required to declare their actual wages for the previous policy period and estimated wages for the new policy period.

An inaccurate declaration may result in:

• An incorrectly calculated premium
• An underpayment or overpayment of premium
• An adjustment or additional premium at a later date
• Additional information requests during a claim or compliance review
• Further examination of employee and contractor classifications

When preparing a wage declaration, businesses should generally review:

• PAYG gross salaries and wages
• Employer superannuation contributions
• Salary-sacrificed superannuation amounts
• Bonuses, commissions and relevant allowances
• Certain fringe benefits or entitlements with a monetary value
• Apprentice wages
• Payments to individual contractors who are considered workers

Not every payment appearing in payroll records is treated in exactly the same way. Similarly, a contractor is not automatically excluded merely because they hold an ABN or issue invoices.

No. Holding an ABN does not, by itself, determine whether a contractor is a worker for WorkCover purposes.

Relevant considerations may include:

• Whether the contractor operates as an individual, company, trust or partnership
• Who personally performs the work
• Whether the contractor can delegate the work
• How much control the business has over the work
• Whether the payment is mainly for personal labour or a complete commercial service
• The practical relationship between the parties

This issue can be particularly important in construction, cleaning, hospitality, beauty services, retail, e-commerce and other industries that regularly engage individual contractors.

Payments made to business owners, directors, trustees or family members need to be considered in light of the business structure, the person’s legal capacity and the practical working relationship.

It should not be assumed that owner remuneration must always be included, or that it can always be excluded. The position may differ between a company, sole trader, partnership and trust.

A WorkCover renewal will generally involve two key figures:

• Actual wages for the previous policy period
• Estimated wages for the new policy period

Actual wages should be reconciled with payroll records, superannuation records, contractor payments, the general ledger and financial statements. Estimated wages should reflect expected changes in employee numbers, pay rates, business activity, new projects, apprentices and contractor arrangements.

Useful records may include:

• Annual payroll reports
• Single Touch Payroll records
• Superannuation reports
• Bonus, allowance and benefit records
• Contractor payment reports
• Contractor ABNs and agreements
• The previous WorkCover wage declaration
• The new financial year’s wage budget
• Employee and apprentice lists
• Details of the business’s industry classification and activities

FABC Accounting offers a WorkCover Review Package to help Queensland small businesses review their wage declarations and supporting records before renewal.

The review may include:

• Assessing the reasonableness of actual and estimated wages
• Identifying potential employee and contractor classification risks
• Reviewing the treatment of superannuation, allowances, bonuses and benefits
• Considering payments made to owners or related parties
• Comparing the industry classification with the actual business activities
• Identifying records that should be prepared or retained

The WorkCover Review Package is available from AUD $199. The final scope will depend on the business structure, number of workers, contractor arrangements and quality of the available records.

WorkCover compliance is not only about having an insurance policy. It is also about reporting wages correctly under the applicable rules. Reviewing the figures and worker classifications before renewal may reduce the risk of unexpected adjustments later.

This article provides general information only and does not constitute legal, insurance or personal financial advice. Wage definitions and worker classifications depend on the particular business structure and working arrangements. Businesses should check current requirements and deadlines published by WorkCover Queensland.