Definition of Wages

Wages declared in the Declaration of Wages form will be used to calculate your premium. The definition of wages for workers compensation is different to that in taxation legislation and is also different in each state/territory.

“Wages” refers to the total gross earnings of your workers before you deduct tax. It includes:

• Salaries and wages
• Overtime, shift and other allowances
• Over-award payments
• Bonuses and commissions
• Payments to working directors (including payments as directors fees)
• Payments to certain contractors
• Payments to piece workers
• Payments for sick leave, public holidays and the associated leave loadings
• The value of any substitutes for wages
• Grossed-up value of fringe benefits (allowances subject to fringe benefit tax are counted at the grossed-up value, that is the value of the benefit multiplied by the relevant Australian Tax Office benefit formula)
• Trust distribution to workers where the distribution is in lieu of wages for work done for the trust.
• Employer superannuation contributions (including the superannuation guarantee levy)
• Long-service leave payments (including lump sum payments instead of long-service leave)
• Termination payments (lump sum payments in respect of annual leave, long-service leave, sick leave and related leave loadings).
• It does not include as wages:
• Directors fees paid to non working directors
• Compensation under the Workers compensation Act 1987
• Any GST component in payment to worker

Disclaimer: This is not advice. Items herein are general comments only and do not constitute or convey advice per se. The information contained in this article is for guidance only and should not be relied upon without obtaining professional advice having regard to your specific circumstances.