Workers compensation premium calculator
This workers compensation calculator gives a quick estimate of a yearly workers comp premium from your wages and a premium rate. Pick an example industry rate or enter the rate from your own insurer, and see the premium per year, per month and per $1,000 of wages.
Updated 12 November 2026 · Uses 2026-27 figures
Estimate a workers comp premium
Enter your yearly wages and choose an example industry rate, or enter your own rate.
General information only, not financial, tax or legal advice. Results are estimates based on 2026-27 figures and the assumptions shown. Check your award, agreement or a qualified adviser for your situation.
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Get a quote Call 0477 567 567How to use the workers comp calculator
- Enter your total wages for the year. Most schemes include super and some contractor payments in the wages figure.
- Choose an industry to use an example rate, or choose Custom.
- If you chose Custom, enter the premium rate from your insurer's renewal notice or quote.
- Read the estimated premium per year, per month and per $1,000 of wages.
How to calculate workers compensation premiums
In most of Australia a workers comp premium is worked out as a percentage of wages:
Premium = wages × premium rate
The premium rate starts from an industry rate based on the type of work you do, then the scheme adjusts it for your business. Larger employers usually have their own claims history factored in, so a business with few claims pays less than the industry rate and one with costly claims pays more. Each state and territory runs its own scheme, such as icare in NSW, WorkSafe Victoria and WorkCover Queensland, so rates and rules differ across the country.
The industry rates in this calculator are examples only, chosen to show how cost changes with risk. They are not quotes and do not match any one scheme. Use the rate on your insurer notice for a real figure.
Worked example
A warehousing business pays $800,000 a year in wages and uses the example rate of 3.2%.
The estimated premium is $800,000 × 3.2% = $25,600 a year, or about $2,133 a month. That is $32.00 for every $1,000 of wages.
The same payroll at the example office rate of 0.4% would cost $3,200, which shows how much the type of work changes the premium.
What affects your premium
- Industry classification. Physical work such as construction, transport and warehousing carries higher rates than office work.
- Wages. The premium rises with the total wages you declare. Under-declaring wages can lead to back-premiums and penalties.
- Claims history. The cost and number of past claims affects the rate for medium and large employers.
- Return-to-work performance. Getting injured workers back to suitable duties quickly reduces claim costs.
- State scheme. Each scheme sets its own average rates, thresholds and minimum premiums.
When is workers compensation insurance required?
Employers in every state and territory must hold workers comp insurance for their workers, with limited exemptions for very small payrolls in some states. Sole traders do not usually need to cover themselves, but they may need cover for workers they hire, and some contractors are treated as workers under state rules. Working without required cover can lead to penalties and to paying claim costs directly.
In a labour hire arrangement the agency is the employer, so it holds workers comp insurance for the workers it places and builds the premium into the charge rate. The host still has work health and safety duties for its site. Read more in our guide to workers compensation in NSW.
Using the premium in your staffing costs
Workers comp is one of the on-costs that make an employee cost more than their salary. Enter your rate into the employee cost calculator to see the full first-year cost, or compare it with a labour hire rate, where the agency carries the premium.
Frequently asked questions
What is workers compensation?
Workers compensation is insurance that covers employees for work-related injuries and illness. It pays for things like lost wages, medical costs and rehabilitation. Employers must hold it under state and territory law, and the premium is paid by the employer.
How is workers compensation calculated for employers?
Most schemes calculate the premium as your wages multiplied by a premium rate. The rate starts from your industry classification and is adjusted for your size and claims history. Your insurer's renewal notice shows the rate and the wages it is based on.
What is workers compensation insurance?
It is a compulsory insurance policy an employer takes out with the state scheme or an approved insurer. It covers the employer's liability to workers who are injured or become ill because of their work.
Do sole traders need workers compensation insurance?
A sole trader with no employees usually does not need cover for themselves, though they can buy personal accident or income protection insurance. If they employ workers, or engage people who count as workers under state law, they generally need a policy.
Who pays workers comp for labour hire workers?
The labour hire agency, because it is the employer. The premium is part of the hourly charge rate. The host business must still provide a safe workplace and work with the agency on safety and return to work.
Can you take annual leave while on workers compensation?
Generally yes, by agreement with your employer, and in many states annual leave continues to accrue while you receive workers comp payments. Rules differ between schemes, so check with your employer and the state scheme.
How long does workers compensation last?
It depends on the state scheme and the injury. Weekly payments usually reduce after set periods and can stop after a maximum time unless the injury is serious. Medical expenses may continue longer. Check the rules with the scheme in the state where the worker is employed.
Related calculators
Related guides
Workers compensation NSWSources and assumptions
- Safe Work Australia: Workers' compensation
- icare NSW: Workers insurance for employers
- WorkSafe Victoria: Premiums
General information only, not financial, tax or legal advice. Results are estimates based on 2026-27 figures and the assumptions shown. Check your award, agreement or a qualified adviser for your situation.