Is workers' compensation insurance tax deductible?

Yes, workers' compensation insurance premiums are generally a tax-deductible business expense for Australian employers. The Australian Taxation Office (ATO) allows businesses to deduct these costs as they are incurred in the process of earning assessable income.

Are sole traders required to have workers' compensation for themselves?

No, sole traders cannot generally cover themselves with workers' compensation insurance because they are not considered employees of their own business. Instead, sole traders often take out personal accident and illness insurance or income protection to provide a financial safety net if they are injured.

Does workers' compensation cover employees working from home?

Yes, employees are typically covered by workers' compensation for injuries that occur in the course of their employment while working from home. Employers maintain the same duty of care to ensure a safe work environment for remote staff as they do for those in a traditional office setting.

Can I claim workers' compensation for a mental health condition?

Yes, psychological injuries are covered if work is the significant contributing factor. However, claims are generally excluded if the condition arose from reasonable management action taken in a reasonable way such as performance appraisals, disciplinary meetings, or transfers.

Which state's insurance applies if an employee works in multiple states?

The state where the employee is 'usually based' is the 'state of connection' and determines which scheme applies. While this means you only need one policy for that specific worker even if they travel, employers with staff based in different states must still hold separate workers' compensation policies for each relevant state or territory scheme.

Do I need workers' compensation for subcontractors?

You may be required to provide workers' compensation for subcontractors if they are classified as 'deemed workers' under your specific state's legislation. This classification often applies if the subcontractor performs the work personally and does not have their own workers' compensation policy or a formal business structure like a proprietary limited company.

Workers' Compensation Insurance

Get Quotes Online

If an employee falls sick due to their job, or is injured while at work, workers compensation insurance will cover their lost wages.
If you are an employer and you dont have workers compensation insurance, you could face fines and even jail time.
The prices of workers compensation insurance varies by state and territory, because it is regulated differently.

How much is workers' compensation insurance?

New South Wales icon

New South Wales

For 2024-2025, the average premium rate is 1.84%.

However, the premium rate can vary depending on industry. The more dangerous the industry, the higher the premium rate. Your premium may also be impacted by your claims history. The average premium rate in NSW has increased by 8% for the second year in a row.

To understand how these premiums are governed, it is essential to distinguish between the two primary bodies: icare and SIRA NSW. icare acts as the service provider and manager of the Workers Compensation Nominal Insurer (the entity that provides the actual insurance), while the State Insurance Regulatory Authority (SIRA) serves as the independent regulator that sets the rules and monitors scheme performance. The Nominal Insurer is a statutory legal entity that operates the Workers Compensation Insurance Fund, providing cover for the vast majority of private sector employers in the state

Victoria icon

Victoria

For 2024-2025, the average premium rate is 1.80%.

This means you multiply the amount you spend on remuneration by 1.80% to get a rough idea of your workers' comp premium.

However, the premium rate can vary depending on industry. The more dangerous the industry, the higher the premium rate. Your premium may also be impacted by your claims history.

Queensland icon

Queensland

For 2024-2025, the average premium rate is 1.34%. It is one of the lowest average rates in Australia

This means you multiply the amount you spend on remuneration by 1.34% to get a rough idea of your workers' comp premium (known in Queensland as WorkCover).

However, the premium rate can vary depending on industry. The more dangerous the industry, the higher the premium rate. Your premium may also be impacted by your claims history.

Western Australia icon

Western Australia

For 2024-2025, the average premium rate is 1.73%.

This means you multiply the amount you spend on remuneration by 1.73% to get a rough idea of your workers' comp premium.

However, the premium rate can vary depending on industry. The more dangerous the industry, the higher the premium rate.

Your premium may also be impacted by your claims history and even which insurer you choose. It's particularly important to compare prices if you live in WA.

South Australia icon

South Australia

For 2024-2025, the average premium rate is 1.85%.

This means you multiply the amount you spend on remuneration by 1.85% to get a rough idea of your workers' comp premium.

However, the premium rate can vary depending on industry. The more dangerous the industry, the higher the premium rate. Your premium may also be impacted by your claims history. South Australia has maintained the same average premium rate as last year.

Tasmania icon

Tasmania

For 2024-2025, the average premium rate is 1.89%.

This means you multiply the amount you spend on remuneration by 1.89% to get a rough idea of your workers' comp premium.

However, the premium rate can vary depending on industry. The more dangerous the industry, the higher the premium rate.

Your premium may also be impacted by your claims history and even which insurer you choose. It's particularly important to compare prices if you live in TAS.

Australian Capital Territory icon

Australian Capital Territory

For 2024-2025, the average premium rate is 2.00%.

This means you multiply the amount you spend on remuneration by 2.00% to get a rough idea of your workers' comp premium.

However, the premium rate can vary depending on industry. The more dangerous the industry, the higher the premium rate.

Your premium may also be impacted by your claims history and even which insurer you choose. It's particularly important to compare prices if you live in ACT. ACT's average premium rate has declined for the last 3 years, down from 2.33% in 2022-23.

Northern Territory icon

Northern Territory

Each business is assigned a rate relative to the risk of their industry. Your gross annual spend on wages is then multiplied by this rate to get your premium.

However, your premium may also be impacted by claims history or even which insurer you choose.

An overview of workers' compensation across Australia

Choose the tab with your state to see who needs workers' compensation, whether you might be exempt, and where you can find more information.

Who needs it	Any employer who pays annual wages over $7,500. Employees can be full time, part time or casual and the agreement can be written or oral. This includes apprenticeships or traineeships.
Who doesn't need it	Employers who pay $7,500 or less in annual wages, unless they have an apprentice or trainee. Employers that have registered as self-insured, usually very large companies. Sole traders
Benefits	Weekly payments for loss of income Payment for permanent impairment Medical and hospital expenses Rehabilitation expenses Property damage expenses Family benefit following work-related death
More information	State Insurance Regulatory Authority or SafeWork NSW

Who needs it	Any employer who pays annual wages over $7,500. Employees can be full time, part time or casual and the agreement can be written or oral. This includes apprenticeships or traineeships.
Who doesn't need it	Employers who pay $7,500 or less in annual wages, unless they have an apprentice or trainee. Employers that have registered as self-insured, usually very large companies. Self-employed people with no employees or apprentices.
Benefits	Weekly payments for loss of income Payment for permanent impairment Medical and hospital expenses Rehabilitation expenses Superannuation contributions Family benefit following work-related death
More information	WorkSafe Victoria

Who needs it	All employers in Queensland Employees can be full time, part time or casual and the agreement can be written or oral. This includes apprenticeships or traineeships.
Who doesn't need it	Employers that have registered as self-insured, usually very large companies. Self-employed people with no employees or apprentices.
Benefits	Lost wages (weekly compensation) Medical and rehabilitation costs Travel (treatment/claim related) Permanent impairment benefit Family benefit following work-related death Common law damages
More information	WorkSafe Queensland

Who needs it	All employers in Western Australia Employees can be full time, part time or casual and the agreement can be written or oral. This includes apprenticeships or traineeships.
Who doesn't need it	Employers that have registered as self-insured, usually very large companies. Self-employed people with no employees or apprentices.
Benefits	Loss of wages Medical and allied health treatment expenses Workplace rehabilitation expenses Travel and accommodation expenses Benefit for permanent impairment Family benefit following work-related death Common law damages
More information	WorkCoverWA

Who needs it	Any employer in South Australia who pays $16,806 or more in wages for the 2026–27 financial year
Who doesn't need it	Employers who pay less than $16,806 in total for the 2026–27 financial year. (However, if your employee is injured at work, you must report the injury, register and pay the minimum premium.) Self employed people with no employees or apprentices Self-insured employers, usually very large companies
Benefits	Loss of earnings Medical expenses Rehabilitation costs Return to work services Permanent and partial impairment benefits Common law claims Family benefits following workplace death
More information	ReturnToWorkSA

Who needs it	All employers in Tasmania Employees can be full time, part time or casual and the agreement can be written or oral. This includes apprenticeships or traineeships.
Who doesn't need it	Employers that have registered as self-insured, usually very large companies. Self-employed people with no employees or apprentices.
Benefits	Loss of wages Medical and rehabilitation costs Nursing and household services Permanent impairment benefit Family benefits following work-related death Common law damages
More information	WorkSafe Tasmania

Who needs it	All employers in the Australian Capital Territory Employees can be full time, part time or casual and the agreement can be written or oral. This includes apprenticeships or traineeships.
Who doesn't need it	Employers that have registered as self-insured, usually very large companies. Self-employed people with no employees or apprentices.
Benefits	Lost wages (weekly compensation) Medical and rehabilitation costs Total or partial incapacity benefits Permanent injury benefits Travel (treatment/claim related) Benefit permanent impairment Death benefits and funeral costs
More information	WorkSafe ACT

Who needs it	All employers in the Northern Territory Employees can be full time, part time or casual and the agreement can be written or oral. This includes apprenticeships or traineeships.
Who doesn't need it	Employers that have registered as self-insured, usually very large companies. Self-employed people with no employees or apprentices.
Benefits	Lost wages (weekly compensation) Medical and rehabilitation costs Return to work expenses Travel and accommodation expenses Family benefits following work-related death
More information	NT WorkSafe

Did you know?

The number of serious workers' compensation claims in 2020-2021 was 130,195. Of these, 12,155 were for mental health conditions. 474 claims were for COVID. Read more statistics here.

What's covered by workers' compensation?

Workers' compensation claims are decided on a case by case basis and rules vary between states. Here's a general overview:

Covered

On-site breaks. Employees are generally covered if they're on-site
Off-site breaks. Employees are covered in NSW, VIC, QLD and NT. They're usually not covered in TAS though, although there are some exceptions. They're not covered at all in SA.
Commuting (ACT, QLD, NT). The ACT covers commutes without restrictions. QLD and NT are generally covered, but with limits.
Illnesses and injuries outside of work. Employees can still make claims for illnesses and injuries that happen outside the workplace, but they'll have to prove their employment was a main contributing factor.
Work-related travel. Employees are covered while undertaking work-related travel. Conditions are stricter in VIC than in other states.

Not Covered

Serious and wilful misconduct. This includes being under the influence of drugs or alcohol, committing a crime. However, death and serious injury benefits may still apply
Self-inflicted injuries. Employees can't make a claim for death, injury or illness that was self-inflicted.
Commuting (NSW, TAS, WA, SA, VIC). NSW and TAS are generally not covered, though there are exceptions. WA, SA and VIC employees are rarely covered at all.
False information. If the employee lied about pre-existing conditions, they may be excluded from making a related claim.

Get a quote for workers' compensation insurance

In Australia, there are 11 workers' compensation schemes. All 8 states or territories have their own one and there are 3 Commonwealth schemes. Find a quote below based on where your business operates.

FAQs

The state where the employee is 'usually based' is the 'state of connection' and determines which scheme applies. While this means you only need one policy for that specific worker even if they travel, employers with staff based in different states must still hold separate workers' compensation policies for each relevant state or territory scheme.
You may be required to provide workers' compensation for subcontractors if they are classified as 'deemed workers' under your specific state's legislation. This classification often applies if the subcontractor performs the work personally and does not have their own workers' compensation policy or a formal business structure like a proprietary limited company.

Finder writers are subject matter experts and use primary sources, in-depth research and interviews with other experts to ensure you're getting accurate, up-to-date information. Articles are fact checked in line with our editorial guidelines.

Thank you for your feedback!

Written by

Alex Reid

Expert

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Alex Reid is Finder’s business insurance cadet. He has a Master of Marketing from the University of Technology Sydney, with a background in business and sales. When not writing about business insurance for Finder he's a keen scuba diver, recently completed his 200th hour underwater and his PADI Divemaster certification. Before working at Finder he lived in Hangzhou China, where he studied Mandarin and Chinese culture. See full bio

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Cameron Thach

Writer

With a background in writing across education, Web3, and finance, Cameron’s mission is to create content that speaks directly to readers in a way that’s easy to understand, helping them navigate complex topics with confidence. Cameron studied a Bachelor of Commerce, Economics and Marketing at Macquarie University, graduating in 2019. See full bio

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18 Responses

JanetFebruary 4, 2025

If I am not on a payroll and am volunteering to work to gain experience, do I need workers comp insurance?

Finder

AngusFebruary 6, 2025Finder

Hi Janet, Worker’s compensation insurance is generally the responsibility of the employer, not anyone working (or volunteering) at the business.

MareeNovember 18, 2024

I would like to get some comparison quotes for my organisations workers compensation insurance? NT based. Is this possible?

Finder

SarahNovember 19, 2024Finder

Hi Maree,

Only insurance companies approved by NT WorkSafe are able to sell employers in the Northern Territory a workers’ compensation insurance policy. In the section above called ‘Get a quote for workers’ compensation insurance’, you can hit the ‘get quote’ button to be connected with an approved insurer. Best of luck!

caroleJune 16, 2024

How much is workers compensation for a sole trader working part time and making $25,000

Finder

SarahJune 20, 2024Finder

Hi Carole,

You can work this out using this government calculator. Best of luck!

BobbieNovember 3, 2023

I am trying to get a quote for workers compensation. It is asking me about yearly payroll. We are a brand new company. How do I address this.

Finder

SarahDecember 14, 2023Finder

Hi Bobbie,

To work out how much you need to pay, you’ll need to declare your estimated wages for the current financial year. As you’re a new company, you’ll need to estimate what you project that might be. If you under or overestimated your wages for your first year, that will be worked out in your second year and the difference will be added or subtracted to adjust your premium for that year.

Hope this helps!

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Workers’ compensation insurance. An essential thing for employers.

Workers' compensation insurance – known as WorkCover in some states – is compulsory in Australia if you employ people, but what you get and how much it costs will be different cost in each state and territory.

Key takeaways