Tax Tip Tuesday: What is Work Cover, Why I need it and How do I calculate it correctly?

Workcover is something that business owners often think about but sometimes never get around to doing something about it.

So let’s look at some of the key things to be aware of and when you need to register for Workcover in QLD.

  • Workcover is a state based scheme that protects employees and employers in the event of a work related injury or disease. It provides a level of insurance so that injured workers can receive entitlements and medical assistance should they be injured in the workplace.
  • The conditions associated with registration vary by state but for instance when looking at the QLD scheme, registration is required when:
  • Any salary and wages are paid to non directors of the business or the non principal of a sole trader business.
  • Businesses that employ apprentices or trainees must register automatically.

To calculate the wages to declare you must include all compulsory and salary sacrificed superannuation of all non directors of the business.

Example Total Gross Wages was $420,000 and $39,900 was paid in super.

The director received a salary of $80,000 with $7,600 in super. The amount to declare for wages for the financial year is ($420,000 + $39,900 – $87,600) = $372,300.

The Workcover registration covers both permanent and casual staff.

It also pays to consider whether your contractors will be considered an employee at an ATO level. Further information on QLD website can be found at https://www.worksafe.qld.gov.au/.