Wages Definition Manual - 30 June 2021 icare Workers Insurance

 
Wages Definition Manual - 30 June 2021 icare Workers Insurance
Wages Definition Manual
30 June 2021

icare Workers Insurance
Disclaimer
                                                This publication may contain work health and safety and workers compensation information.
                                                To ensure you comply with your legal obligations you must refer to the appropriate legislation.
                                                Information on the latest laws can be checked by visiting the NSW legislation website
                                                (www.legislation.nsw.gov.au).
                                                This publication does not represent a comprehensive statement of the law as it applies to
                                                particular problems or to individuals or as a substitute for legal advice. You should seek
                                                independent legal advice if you need assistance on the application of the law to your situation.

                                            Contents
                                            Introduction............................................................................................................................3
                                            Chapter A – Meaning of ‘remuneration’..........................................................................5
                                            Chapter B – icare’s interpretation in relation to particular payments....................7
                                            Chapter C – Directors’ fees and payments................................................................... 19
                                            Chapter D – Trust distributions...................................................................................... 20
                                            Chapter E – Meaning of ‘worker’.................................................................................... 22
                                            Chapter F – Meaning of Deemed workers................................................................... 24
                                            Chapter G – Contractors................................................................................................... 25
                                            Chapter H – Apprentices and trainees......................................................................... 27
                                            Chapter I – Record-keeping requirements & Premium Reviews............................ 29

                                            Important information

                                            Paragraphs preceded by a number in the Wages Definition Manual are variously
                                            referred to throughout the manual as ‘rules’. These rules provide guidance as to
                                            what is included in remuneration and how the provisions are generally applied for
                                            workers’ compensation insurance purposes.

                                            The two main Acts referred to in the Wages Definition Manual are:

                                            •     Workers Compensation Act 1987 (the 1987 Act)

                                            •     Workplace Injury Management and Workers Compensation Act 1998
                                                  (the 1998 Act).
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                                            For further information on how premiums are calculated, refer to icare’s website
                                            http://www.icare.nsw.gov.au

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Introduction                                              What can you use this manual for?
                                                                                                      You can use this manual to help you determine
                                            The purpose of this manual is to provide a
                                                                                                      whether a particular payment is to be counted as
                                            guide to employers, accountants, auditors and
                                                                                                      ‘remuneration’ for the purposes of assessing the
                                            other interested parties, on remuneration taken
                                                                                                      employer’s premium. See Chapter B, which sets out
                                            into account for the purposes of assessing an
                                                                                                      icare’s interpretation in relation to many different
                                            employer’s workers’ compensation premiums.
                                                                                                      types of payments.
                                            It aims to help ensure there is a consistent
                                                                                                      Whether a payment is remuneration for the
                                            approach to the declaration of remuneration.
                                                                                                      purposes of workers’ compensation is set out in
                                            This consistency will help make sure that each
                                                                                                      the 1987 Act and the 1998 Act. The purpose of this
                                            employer covered for workers’ compensation
                                                                                                      manual is to provide general information about the
                                            insurance administered by icare pays the correct
                                                                                                      legislation and how icare interprets it.
                                            amount of premium.

                                            Where a payment to a worker is made in lieu               Why is this manual needed?
                                            of wages (regardless of the terminology used
                                                                                                      The manual deals with the definitions of
                                            to describe that payment) then the payment is
                                                                                                      ‘remuneration’ and ‘worker’ and some related
                                            counted as remuneration for the purposes of
                                                                                                      administrative matters e.g. record keeping and
                                            calculating workers’ compensation premiums.
                                                                                                      resolving disputes.
                                            Many of the payments covered by the 1987 Act
                                            under the definition of ‘wages’ are not of the type       What is an employer’s premium
                                            that might be generally thought of as wages –
                                                                                                      based on?
                                            for example, the definition includes ‘any other
                                            consideration in money or money’s worth given to          Each employer’s workers’ compensation premium
                                            the worker’ under a contract of service or a training     is based on various things, including:
                                            contract. For this reason, icare uses the term            •    the industry in which the employer operates
                                            ‘remuneration’.
                                                                                                      •    the amount of remuneration the employer pays
                                            This edition supersedes the June 2018 edition.                 to its workers

                                                                                                      •    for those employers who are experience-
                                            How the system works                                           adjusted the cost of any claims made by their
                                            icare collects workers’ compensation premiums                  workers. For a definition of an experience-
                                            from employers to cover the costs associated with              adjusted employer go icare’s website http://
                                            work-related injuries and diseases. This includes              www.icare.nsw.gov.au.
                                            payment of benefits to an injured worker, to cover
                                                                                                      Some employers are no longer required to obtain
                                            them for the loss of wages, medical and other
                                                                                                      a workers’ compensation insurance policy for their
                                            health related treatment, rehabilitation and lump
                                                                                                      workers. If the employer pays, or expects to pay,
                                            sums for permanent disabilities.
                                                                                                      $7,500 or less in annual remuneration during a
                                                                                                      financial year then they are not required to hold a
                                                                                                      policy.

                                                                                                      However, if an employer engages apprentices or is
                                                                                                      a member of a Group for workers’ compensation
                                                                                                      purposes, they are still required to take out a
                                                                                                      workers compensation insurance policy, regardless
                                                                                                      of the amount of annual wages paid. This also
                                                                                                      applies to employers whose NSW Workers
                                                                                                      Compensation Industry Classification (WIC) is
                                                                                                      subject to per capita rates (e.g. Taxi Drivers (shifts/
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                                                                                                      No. of plates), Boxers (bouts) and Harness Racing
                                                                                                      jockeys (drives)).

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Remuneration includes wages and other amounts             Improving this manual
                                            such as allowances, fringe benefits, superannuation
                                                                                                      icare welcomes comments on this manual and any
                                            and payments made to contractors who are
                                                                                                      suggestions as to how it might be improved. We
                                            deemed to be workers.
                                                                                                      will then update it as required.
                                            Penalties may apply if an employer provides
                                            incorrect wage declarations or fails to take out          Any questions?
                                            a policy, if not an exempt employer, when their
                                            wages exceed $7,500 in a financial year.                  If you have any questions about this manual, please
                                                                                                      contact icare’s Customer Service Centre at:

                                            Why is the level of weekly compensation                   Phone:     13 44 22
                                            benefits different to what an employer                    Email:     wisupport@icare.nsw.gov.au
                                            declares as remuneration?                                 Postal
                                            Payments of weekly compensation benefits to an            Address:   GPO Box 4052, Sydney, NSW 2001
                                            injured worker are calculated in accordance with
                                                                                                      If you are an employer wishing to dispute
                                            the 1987 and 1998 Acts.
                                                                                                      the assessment of your premium, refer to the
                                            Weekly benefits form only one element of workers’         information on disputes in Chapter I.
                                            compensation benefits that an injured worker may
                                            be entitled to receive. Depending on the nature and
                                            severity of their injury, they may receive medical
                                            and other health-related treatments, rehabilitation,
                                            medication for their injury, or be entitled to a lump-
                                            sum payment for a permanent impairment.

                                            The relevant legislation
                                            This manual sets out the criteria icare applies
                                            in determining the amount of remuneration an
                                            employer must declare. icare also uses the same
                                            criteria for the purposes of:

                                            •   considering an employer’s request for a review
                                                regarding the payments included in a worker’s
                                                remuneration.

                                            •   considering an employer’s understatement
                                                of wages. See section 174 of the 1987 Act

                                            •   considering an employer’s possible evasion of
                                                correct premiums. See sections 175 and 175A
                                                of the 1987 Act. For non-insurance, see sections
                                                155 and 156 of the 1987 Act.
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Chapter A – Meaning of                                       a. includes salary, overtime, shift and other
                                                                                                            allowances, over-award payments, bonuses,
                                            ‘remuneration’                                                  commissions, payments to working directors
                                                                                                            (including payments as directors’ fees),
                                                                                                            payments for public and annual holidays
                                            Many of the payments covered by the 1987 Act
                                                                                                            (including loadings), payments for sick leave,
                                            under the definition of ‘wages’ are not of the type
                                                                                                            value of board and lodging provided by
                                            that might be generally thought of as wages –
                                                                                                            the employer for the worker and any other
                                            for example, the definition includes ‘any other
                                                                                                            consideration in money or money’s worth given
                                            consideration in money or money’s worth given to
                                                                                                            to the worker under a contract of service or a
                                            the worker under a contract of service or a training
                                                                                                            training contract
                                            contract. For this reason, icare uses the term
                                            ‘remuneration’.                                              b. includes payment (whether by way of
                                                                                                            commission, fee, reward or otherwise) under
                                            What is this chapter for?                                       a contract (whether referred to as a contract,
                                                                                                            agreement, arrangement or engagement) by
                                            An employer’s premium is calculated on the basis
                                                                                                            reason of which the person paid is deemed by
                                            of ‘remuneration’ paid to ‘workers’. So the meaning
                                                                                                            Schedule 1 to the 1998 Act to be a worker, after
                                            of each of those terms is crucial. This chapter deals
                                                                                                            deducting such amount for costs necessarily
                                            with ‘remuneration’.
                                                                                                            incurred by that person in performing that
                                            Worker is explained in Chapter E.                               contract as may be agreed on or, in default
                                                                                                            of agreement, as may be determined by the
                                            This chapter covers the general principles in                   Authority, and
                                            relation to ‘remuneration’. The detailed list of icare’s
                                            interpretation in relation to particular types of            c. includes payments for long service leave
                                            payments is in Chapter B. However, because of the               (including a lump sum payment instead of
                                            complexity involved in each of the following areas,             long service leave and any payment under the
                                            there is a separate chapter for:                                Building and Construction Industry Long Service
                                                                                                            Payments Act 1986) or the Contract Cleaning
                                            •   directors – see Chapter C                                   Industry (Portable Long Service Leave Scheme)
                                            •   trusts – see Chapter D                                      Act 2010, and

                                            •   superannuation – see Chapter A & B                       d. includes a payment made in consequence of
                                                                                                            the retirement from, or termination of, any
                                            •   deemed workers – see Chapter F
                                                                                                            office or employment of a worker, being:
                                            •   contractors – see Chapter G
                                                                                                              i.    a lump sum payment paid before or after
                                            •   apprentices, trainees and government training                       that retirement or termination in respect of
                                                programs – see Chapter H.                                           unused annual leave, or unused annual leave
                                                                                                                    and a bonus, loading or other additional
                                            What payments are counted as                                            payment relating to that leave, or
                                            remuneration?                                                     ii.   an amount paid in respect of unused long
                                            The 1987 Act defines ‘wages’ broadly.                                   service leave, or
                                                                                                              iii. an amount paid in respect of unused sick
                                            Generally, a payment to a worker is ‘remuneration’
                                                                                                                   leave, and
                                            if it is made to, or for the benefit of, the worker.
                                                                                                         e. includes the amount that is the employer’s
                                            What is the definition of ‘wages’ in the                        fringe benefits taxable amount (within the
                                                                                                            meaning of the Fringe Benefits Tax Assessment
                                            1987 Act?
                                                                                                            Act 1986 of the Commonwealth) in respect of
                                            Section 174 (9) of the 1987 Act defines wages as                fringe benefits payable to the worker, and
                                            follows
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                                                                                                         f.   includes a superannuation benefit, being money
                                            wages in relation to a worker-                                    paid or payable by the employer in respect of
                                                                                                              the worker:

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i.    to or as a superannuation fund within                    a. there is a wages shortfall in respect of work
                                                       the meaning of the Superannuation                           done for the trust by the worker
                                                       Industry (Supervision) Act 1993 of the
                                                       Commonwealth, or                                         b. the distribution is made in the financial year
                                                                                                                   in which the work is done or in the following
                                                 ii.   as a superannuation guarantee charge                        financial year.
                                                       within the meaning of the Superannuation
                                                       Guarantee (Administration) Act 1992 of the          4. There is a wages shortfall in respect of work
                                                       Commonwealth, or                                       done for the trust by the worker if the total
                                                                                                              wages (if any) paid or payable to the worker
                                                 iii. to or as any other form of superannuation,              during the financial year in which the work
                                                      provident or retirement fund or scheme,                 is done is less than the wages that would be
                                                      including a wholly or partly unfunded fund              payable to the worker for that work if wages
                                                      or scheme, and                                          were payable at the market rate for that work
                                                                                                              (with the difference constituting the wages
                                            g. includes a distribution to a worker as
                                                                                                              shortfall for the purposes of subsection (5)).
                                               beneficiary under a trust that is required to be
                                               included as wages by Section 174AA, and                     5. If the distribution does not exceed the wages
                                                                                                              shortfall in respect of the work, the whole of
                                            h. does not include:                                              the distribution is in lieu of wages for work
                                                 iv. directors’ fees (except to the extent that               done for the trust by the worker. Alternatively,
                                                     these fees are payable to working directors              if the distribution exceeds the wages shortfall in
                                                     and are included as wages under paragraph                respect of the work, the distribution is in lieu of
                                                     (a)), or                                                 wages to the extent of the shortfall.

                                                 v.    compensation under this Act, or                     6. For the purpose of determining whether a
                                                                                                              particular distribution is in lieu of wages for
                                                 vi. (vii) any GST component in a payment to a
                                                                                                              work done for the trust, the total wages (if
                                                     worker.
                                                                                                              any) paid or payable to the worker during a
                                            See Chapter B for the detailed list of icare’s                    financial year for the work is taken to include
                                            interpretation in relation to particular types of                 any previous distribution (whether made during
                                            payments.                                                         that financial year or the following financial
                                                                                                              year) that, by application of this section, is a
                                                                                                              distribution in lieu of wages for the same work.
                                            Inclusion of trust distributions as wages
                                                                                                           7.   The market rate for work is the minimum wage
                                            Section 174AA of the 1987 Act states the following
                                                                                                                rate applicable in respect of the work (or work
                                            1.    A distribution to a worker as beneficiary under               that is comparable to the work):
                                                 a trust constitutes wages for the purposes of
                                                 section 174 to the extent that the distribution is             a. pursuant to an industrial instrument in force
                                                 in lieu of wages for work done for the trust by                   under a law of the State
                                                 the worker.
                                                                                                                b. if paragraph (a) does not apply, pursuant to
                                            2. Work that constitutes the provision of services                     an industrial instrument in force under a law
                                               to the trustee of a trust, or for the purposes of a                 of the Commonwealth
                                               business conducted by the trustee of a trust, is
                                                                                                                c. if neither paragraph (a) nor (b) applies, as
                                               work done for the trust.
                                                                                                                   provided by the Workers Compensation
                                            3. This section applies in respect of distribution to                  Guidelines or as determined and notified by
                                               a worker only if:                                                   the Authority in the particular case.

                                                                                                           See Chapter D for more information on trust
                                                                                                           distributions.
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Chapter B – icare’s                                         Allowances and expenses (see details
                                                                                                        under the headings about various types
                                            interpretation in relation                                  of allowances and expenses)
                                            to particular payments                                      Allowances and expenses can generally be
                                                                                                        separated into two broad categories, those which
                                            (Supplement to section 174 (9) of the 1987 Act)             are intended to reimburse actual expenditure
                                                                                                        incurred by a worker as part of their employment
                                            How do you use this list?                                   (e.g. tool allowance, travelling allowance, meal
                                                                                                        allowance etc) and those which relate in some way
                                            The list in this chapter sets out icare’s interpretation    to the nature or location of the work itself (e.g.
                                            as to what is remuneration (and what is not) as             height allowance, shift allowance, skills allowance
                                            applied to many particular types of payments.               etc).
                                            In the list, you can look up the type of payment            Although the terms allowances and expenses
                                            about which you need guidance and then apply                are sometimes interchangeable, the following
                                            icare’s interpretation to your situation.                   principles generally apply regardless of the
                                                                                                        terminology applied to the payment:
                                            You need to bear in mind that it is impractical for
                                            this manual to deal with every particular type of           •    Any ordinary amount paid as part of wages
                                            payment an employer might ever make to, or in                    under an Award which are intended to
                                            relation to, a worker or a deemed worker.                        reimburse actual expenditure incurred by a
                                                                                                             worker as part of their employment (such
                                            In unusual cases, not covered by this manual:                    as tool allowance, travelling allowance, meal
                                            •   Employers should contact icare for advice.                   allowance etc) is not counted as remuneration.

                                            •   If an employer disputes what is included as             •    Any ordinary amount paid as part of wages
                                                remuneration, icare will assess the matter                   under an award paid to a worker as part of
                                                consistent with the law and the principles                   their employment which relate in some way
                                                outlined in this manual. This manual provides                to the nature or location of the work itself
                                                guidance about icare’s interpretation of the law.            (such as height allowance, shift allowance, skill
                                                                                                             allowance, etc) is counted as remuneration.
                                            •   Unless stated otherwise (e.g. fringe benefits)
                                                the gross amount is counted as remuneration.            •    Any payment greater than the Award rate is
                                                                                                             counted as remuneration.
                                            The following is a summary of common
                                            remunerations payments and shows if the payment             •    Any consideration subject to fringe benefits tax
                                            is to be counted as remuneration.                                is counted as remuneration.

                                                                                                        •    Where there is no applicable Award or
                                            Adoption leave                                                   industrial instrument the entire payment is
                                                                                                             counted as remuneration unless indicated
                                            Adoption leave payments are counted as
                                                                                                             otherwise in the following notes. Further,
                                            remuneration.
                                                                                                             where a payment is made having no regard to
                                                                                                             an actual expense being incurred, the entire
                                            Advancement of salary payments                                   payment is counted as remuneration.
                                            Payment in advance of salary or any other                   Award means any industrial instrument within
                                            entitlements is counted as remuneration.                    the meaning of the Industrial Relations Act
                                                                                                        1996, any agreement with respect to salaries or
                                                                                                        wages entered into between an employer and a
                                                                                                        union under any other NSW law, and any other
                                                                                                        award, agreement or other instrument under a
                                                                                                        Commonwealth, State or Territory law.
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Annual leave and public holiday                           Car allowances and expenses
                                            payments (including loadings)                             Payments made in accordance with an Award
                                            Annual leave and public holiday payments are              or industrial instrument that represent a
                                            counted as remuneration. Lump sum payments                reimbursement of actual expenses incurred by
                                            on termination for annual leave are counted as            a worker as part of their employment, are not
                                            remuneration, including payments made on the              counted as remuneration. However, any payment
                                            death of a worker.                                        greater than the award rate is counted as
                                                                                                      remuneration.

                                            Apprenticeship Schemes                                    In instances where a payment is made having no
                                            See Chapter H.                                            regard to the actual expenses incurred, the entire
                                                                                                      payment is counted as remuneration.

                                            Australian Construction Industry                          Where there is no applicable Award or industrial
                                            Redundancy Trust (ACIRT)                                  instrument, any payment up to the nominated
                                                                                                      cents per kilometre rate as regulated by SIRA is not
                                            Payments to the Australian Construction Industry          counted as remuneration. However, any payment
                                            Redundancy Trust (ACIRT), known previously as             greater than the nominated cents per kilometre
                                            the Construction Employees Redundancy Trust               rate is counted as remuneration.
                                            (CERT), are not counted as remuneration.
                                                                                                      Further information in calculating the extent to
                                            See Termination payments for further information.         which motor vehicle allowances are excluded from
                                                                                                      wages are published on icare’s website https://
                                            Board and lodging                                         www.icare.nsw.gov.au/employers/premiums/
                                                                                                      premium-updates/
                                            If the employer provides free or subsidised
                                            board and lodging to the worker as part of their          See ‘Company car’, ‘Fringe benefits’ and
                                            conditions of employment (whether expressed               ‘Allowances and expenses’.
                                            or implied) then the benefit is counted as
                                            remuneration. Remuneration is the relevant market
                                            value of the total value of the board and lodging.
                                                                                                      Charities, churches and public
                                                                                                      benevolent institutions
                                            See ‘Housing’ and ‘Fringe benefits’.
                                                                                                      All fringe benefits provided to workers are counted
                                                                                                      as remuneration.
                                            Bonuses
                                                                                                      Charities, churches and public benevolent
                                            Bonuses are counted as remuneration.
                                                                                                      institutions may have different fringe benefit
                                                                                                      thresholds. These organisations should maintain
                                            Building and Construction Industry Long                   with their wage records the appropriate fringe
                                            Service Leave Scheme                                      benefit thresholds for their organisations.

                                            Certain payments made under the Building and              Worker benefits that are not subject to fringe
                                            Construction Industry Long Service Payments Act           benefits tax, that is they are less than the relevant
                                            1986 are counted as remuneration.                         Australian Tax Office (ATO) fringe benefit
                                                                                                      threshold, should be counted at the net value.
                                            Long service leave payments made directly to
                                            workers in the building and construction industry         Once the workers’ benefits exceed the ATO fringe
                                            by their employers are counted as remuneration.           benefit threshold then the employer must declare
                                            The amount to be counted is the payment to the            those fringe benefits at the grossed-up value. That
                                            worker less the reimbursement receivable from the         is, the portion of the benefit that exceeds the ATO
                                            Building and Construction Industry Long Service           threshold (called the non- exempt amount by the
                                            Leave Corporation in respect of those payments.           ATO) must be declared at the grossed-up value
                                                                                                      and the portion of the benefit that is below the
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                                            Payments made on benefits accrued before 30
                                                                                                      threshold should be declared at the net value (i.e.
                                            June 2003 and paid after that date is counted as
                                                                                                      actual value of the benefit).
                                            remuneration.
                                                                                                      See ‘Fringe benefits’ and ‘Rebatable employers’.

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Childcare expenses                                        Company car – private use of
                                            If the employer pays the worker’s childcare               If an employer provides a worker with a car,
                                            expenses, then the payment is counted as                  including a worker’s private use of a car or through
                                            remuneration.                                             any type of leasing arrangements for private use,
                                                                                                      the benefit is counted as remuneration.
                                            See ‘Fringe benefits’ and ‘Allowances and
                                            expenses’.                                                See also ‘Car allowances and expenses’ and ‘Fringe
                                                                                                      benefits’.
                                            Cleaning Industry Portable Long Service
                                            Leave Scheme                                              Company house (market value of rental)
                                            The Cleaning Industry Portable Long Service Leave         See ‘Housing’.
                                            Scheme, established under the Contract Cleaning
                                            Industry (Portable Long Service Leave Scheme)             Compensation payments
                                            Act 2010, commenced on 1 July 2011 and is funded
                                                                                                      See ‘Workers compensation payments’.
                                            by quarterly levies that are payable by employers
                                            to the Long Service Leave Corporation.
                                                                                                      Construction allowances
                                            Long service leave payments made directly to
                                                                                                      Construction allowances are counted as
                                            workers in the cleaning industry by their employers
                                                                                                      remuneration whether or not they are paid in
                                            are counted as remuneration. The amount to be
                                                                                                      accordance with an Award or industrial instrument.
                                            counted is the payment to the worker, less the
                                                                                                      Allowance types include; productivity, height,
                                            reimbursement receivable under the Cleaning
                                                                                                      foreman, wet day, leading hand, dirty work, shift,
                                            Industry Portable Long Service Leave Scheme from
                                                                                                      skill, heat and cold and site allowances.
                                            the Long Service Leave Corporation in respect of
                                            those payments.
                                                                                                      Contractors – deemed to be workers
                                            Payments made on benefits accrued before 1 July
                                            2011 and that are paid after that date are counted        See Chapter G.
                                            as remuneration. The quarterly levy is not counted
                                            as remuneration.                                          Credit card expenses
                                                                                                      Payment of personal expenses with an employer
                                            Clothing                                                  supplied credit card that are not subject to
                                            If the employer pays for or reimburses the worker         reimbursement by the worker is counted as
                                            for clothing expenses that the worker incurs as           remuneration.
                                            part of their employment, then the payment is not
                                                                                                      See ‘Fringe benefits’.
                                            counted as remuneration. In any other case, the
                                            payment is counted as remuneration.
                                                                                                      Directors’ fees and payments
                                            See ‘Uniform allowance’, ‘Fringe benefits’ and
                                                                                                      See Chapter C.
                                            ‘Allowances and expenses’.

                                                                                                      Dirt money
                                            Commission(s)
                                                                                                      Dirt money is counted as remuneration.
                                            Commissions are counted as remuneration.

                                                                                                      Distant work allowance
                                            Community Development Employment
                                            Project (CDEP)                                            See ‘Living-away-from-home allowance’.

                                            Remuneration an employer pays to workers in the
                                            CDEP is counted as remuneration for the purposes
                                                                                                      Dividends
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                                            of calculating an employer’s premium. However,            See Chapter C.
                                            the other costs funded by the Project are excluded
                                            (e.g. costs for equipment and rental).

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Domestic worker’s payments                                  The fifth year employee does not work but receives
                                                                                                        the 20 per cent that has been put aside throughout
                                            Wages, salary, fringe benefits, superannuation
                                                                                                        the previous four (4) years, this payment is not
                                            and/or any other consideration provided by an
                                                                                                        counted as remuneration.
                                            employer for a domestic worker are counted as
                                            remuneration under the Workers’ Compensation
                                            policy.                                                     Free housing
                                                                                                        See ‘Housing’.
                                            Early retirement benefits
                                            See ‘Termination payments’.                                 Fringe benefits
                                                                                                        Generally, if a non-cash component of a worker’s
                                            Employee share schemes                                      remuneration is considered taxable under the
                                                                                                        Fringe Benefits Tax Assessment Act 1986 then, for
                                            Any benefit in money or money’s worth received
                                                                                                        the purpose of calculating the employer’s premium,
                                            by a worker or their family members under
                                                                                                        it is counted as remuneration.
                                            an employee share scheme is counted as
                                            remuneration if the payment or remuneration                 For more information about specific items
                                            (shares, share options, dividends, trust distributions      attracting fringe benefits, see the relevant headings
                                            etc) is made in lieu of wages or classified as a fringe     in this list.
                                            benefit under the Fringe Benefits Tax Assessment
                                            Act 1986 (Commonwealth)                                     At what value?
                                                                                                        For any fringe benefit, the amount that is to
                                            Entertainment expenses                                      be counted as remuneration is the value of the
                                            If the employer pays for or reimburses the worker           benefits calculated using the ‘taxable value of
                                            for entertainment-related expenses and the                  fringe benefits’ ending 31 March in the particular
                                            payment is subject to fringe benefits tax, then             premium policy year, as specified in the Fringe
                                            payment is counted as remuneration.                         Benefits Tax Assessment Act 1986. The value of
                                                                                                        the benefits provided is the total of the Type 1 and
                                            See also ‘Fringe benefits’ and ‘Allowances and              Type 2 aggregate amounts multiplied by the Type 2
                                            expenses’.                                                  gross up rate applicable at the time (available from
                                                                                                        the Australian Taxation Office (ATO) website).
                                            Fares
                                                                                                        For example, a $2000 gym membership would be
                                            See ‘Travel allowance’.                                     valued at the grossed-up taxable amount which
                                                                                                        is $2000 x the relevant FBT grossed-up formula
                                            First aid allowances                                        amount.

                                            First aid allowances are counted as remuneration.           When a policy is cancelled mid-term, the benefit
                                                                                                        declared should be calculated on a pro-rata basis
                                            Flexible work package payments                              having regard to the period elapsed.

                                            (pre-purchased leave arrangements)                          When a business ceases to operate, the employer
                                            Any wages, salary and any other consideration in            should declare the value of the benefit up to the
                                            money or money’s worth the employer provides                date of ceasing the business as per the employer’s
                                            to a worker as part of a ‘flexible work package             FBT return.
                                            arrangement’ are counted as remuneration.
                                                                                                        What if the benefit is available to all of an
                                            Payments made to a worker whilst on a flexible              employer’s workers?
                                            work leave arrangement are not counted as
                                                                                                        Any fringe benefits that are available to workers as
                                            remuneration.
                                                                                                        an incidental benefit of employment are counted as
                                            For example, five (5) year package, first four (4)          remuneration.
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                                            years employee works and receives 80 per cent of
                                                                                                        See ‘Charities, churches and public benevolent
                                            salary and 20 per cent is held by employer, 100 per
                                                                                                        institutions’ and ‘Rebatable employers’.
                                            cent of remuneration is counted.

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Gifts                                                         For the purposes of this exclusion, government
                                                                                                          programs include but are not limited to the
                                            If an employer provides a gift to a worker and it
                                                                                                          “JobKeeper payment”, the “Aged Care Retention
                                            is subject to fringe benefits tax, then the gift is
                                                                                                          Bonus” and the “Council Job Retention Allowance”.
                                            counted as remuneration. Bonuses and incentive
                                            awards are counted as remuneration.                           Example: A part-time worker whose usual weekly
                                                                                                          earnings are $500 may take annual leave and
                                            See ‘Fringe benefits’.
                                                                                                          receive the full $750 JobKeeper payment during
                                                                                                          that leave period. As the worker was entitled
                                            Goods and Services Tax (GST)                                  to receive $500 under their usual employment
                                            The Goods and services tax component of any                   arrangements, $500 of the $750 paid to the worker
                                            payment paid to a worker, or a contractor who is a            is considered wages for premium purposes and
                                            deemed worker, is not counted as remuneration.                $250 must be excluded from wages for premium
                                                                                                          purposes.

                                            Government funded allowances to                               2. COVID payments made to workers not working
                                            support retention of staff during                             An insurer may exclude from wages any payment
                                            COVID-19 pandemic                                             (other than a payment subsidised by a government
                                            The State Insurance Regulatory Authority (SIRA)               program described in 1 above) made to a worker
                                            has determined that:                                          who performed no work during the period to which
                                                                                                          the payment relates but only if the payment was
                                            1.   Payments subsidised by government                        a type of payment that is temporary in nature and
                                                 COVID programs                                           made to support workers during the COVID-19
                                                                                                          pandemic.
                                            An insurer must exclude from wages any payment
                                            (or any part of any payment) made to a worker by              Example: An insurer may exclude a temporary paid
                                            an employer if the insurer is satisfied that:                 leave entitlement for workers who are required to
                                                 i.    the employer was provided funds to                 self-isolate because they contract or are exposed to
                                                       make the payment (or the employer was              COVID-19.
                                                       reimbursed for the payment) under a
                                                       government program established to                  Government training schemes, Group
                                                       support workers and employers impacted             apprentice Schemes and Government
                                                       by the COVID-19 pandemic; and
                                                                                                          training subsidies
                                                 ii.   the worker was not entitled to receive the
                                                                                                          See Chapter H.
                                                       payment under their ordinary employment
                                                       arrangements, for example the payment
                                                       was not a payment for work performed               Height money
                                                       or a paid leave entitlement.                       Height money is counted as remuneration.

                                            The insurer must exclude from wages any amounts
                                            received by a worker that have been paid under                Honorariums
                                            a relevant government program, to the extent of               Honorariums to volunteers or non-workers are not
                                            the difference between the amount of the funds                counted as remuneration. Volunteer workers are
                                            provided to the employer to make the payment (or              generally not covered for workers’ compensation.
                                            the amount of the reimbursement) and any amount               However, employers may still be liable for any
                                            the worker was entitled to receive during the                 injuries to volunteers. Employers should check with
                                            period to which the payment relates, for example              icare to ensure they have the appropriate coverage.
                                            wages for work performed.                                     However, should an employer elect to pay wages to
                                            This exclusion applies to all policies in force for           a worker so that they may volunteer, or take leave
                                            any period during which relevant government                   to volunteer, the wages paid to the worker for the
                                                                                                          period the worker takes leave/undertakes volunteer
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                                            programs were being administered, irrespective of
                                            policy issue date.                                            activities are counted as remuneration.

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Housing and Housing Loans                                     Test D: in the case of a worker working on a ship,
                                                                                                                   if no single State/Territory is identified
                                            Generally, housing payments, including company
                                                                                                                   by Test A, Test B or Test C: a worker’s
                                            house, free housing and housing loans, are counted
                                                                                                                   employment is, while working on a ship,
                                            as remuneration. Remote housing allowances are
                                                                                                                   connected with the State/Territory in
                                            not counted as remuneration.
                                                                                                                   which the ship is registered or (if the ship
                                            The following payments are counted as                                  is registered in more than one jurisdiction)
                                            remuneration:                                                          the State/Territory in which the ship most
                                                                                                                   recently became registered, or
                                            •   the current market rental value of a company
                                                house less any amount the worker pays for the             Test E: If no single State/Territory is identified by
                                                right to occupy the premises                                       Test A, B, C or D (if applicable), a worker’s
                                                                                                                   employment is connected with a State/
                                            •   the amount of temporary accommodation,
                                                                                                                   Territory if the worker is in that State/
                                                associated with relocation, that is assessable
                                                                                                                   Territory when an injury happens to that
                                                for fringe benefits tax
                                                                                                                   worker and there is no place outside
                                            •   the taxable value of a housing loan that is                        Australia under the legislation of which the
                                                offered to a particular worker as part of                          worker may be entitled to compensation
                                                 their salary package and is subject to                            for the same matter.
                                                fringe benefits tax.
                                                                                                          Wages, salary, fringe benefits and/or any other
                                                                                                          consideration provided by an employer for a
                                            Income splitting                                              worker who has a NSW ‘State of Connection’ is
                                            Fringe benefits and/or any other consideration, in            counted as remuneration against the employer’s
                                            payment for work done by a worker and provided                NSW workers’ compensation policy.
                                            by an employer to a person other than the worker
                                            as part of an income -splitting arrangement, is               JobCover Placement Program
                                            counted as remuneration, with the exception of
                                            trust distributions                                           If an employer engages a previously injured
                                                                                                          worker under the JobCover Placement Program,
                                                                                                          then the wages the employer pays that worker
                                            Interstate workers                                            are not counted as remuneration for the first 24
                                            Workers compensation insurance requirements                   months of that person’s employment subject to the
                                            vary throughout Australia. Employers must verify              conditions contained in the ‘JobCover Placement
                                            with the relevant State or Territory authority the            Program Guidelines’. The guidelines are available
                                            legislative requirements of that State or Territory.          on the State Insurance Regulatory Authority (SIRA)
                                                                                                          website http://www.sira.nsw.gov.au/.
                                            The cross-border provisions contained in the 1987
                                            Act determine in which jurisdiction the worker is
                                            entitled to claim compensation.                               Jury duty payments
                                                                                                          Payments made by the Court to a worker for jury
                                            A worker’s ‘State of Connection’ is determined
                                                                                                          duty attendance are not counted as remuneration.
                                            by a cascading series of tests as follows:
                                                                                                          Return travel and meal allowances included in
                                            Test A: the State/Territory in which the worker               jury fees paid by the Court are not counted as
                                                    usually works in that employment, or                  remuneration. Employers are obligated to pay
                                                                                                          full time and permanent part-time employees for
                                            Test B: if no single State/Territory is identified by         the first 10 days of jury duty, which is counted as
                                                     Test A, the State/Territory in which the             remuneration. If a juror reimburses their employer
                                                     worker is usually based for the purposes             the allowance received from the court, because
                                                     of that employment, or                               the employer has paid their normal wages, only the
                                                                                                          normal wages paid to the worker by the employer
                                            Test C: if no single State/Territory is identified
                                                                                                          are counted as remuneration.
                                                     by Test A or Test B, the State/Territory in
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                                                     which the employer’s principal place of
                                                     business in Australia is located, or

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Laundry allowance                                          Loan payments
                                            If the employer pays for or reimburses a worker for        Repayment of loans to working directors/working
                                            laundry related expenses that the worker incurs as         beneficiaries/workers which are commercially
                                            part of their employment, then the payment is not          based, legally documented and subject to taxation
                                            counted as remuneration. In any other case, the            are not counted as remuneration.
                                            payment is counted as remuneration.
                                                                                                       Otherwise the payment of loan amounts to
                                            See ‘Fringe benefits’ and ‘Expenses and                    working directors/working beneficiaries/workers
                                            allowances’.                                               are assessable as remuneration based on the
                                                                                                       hours worked and the type of work performed.
                                            Lease payments                                             The amount is limited to the current market value
                                                                                                       of the remuneration that would be paid to a worker
                                            Payment of lease/rent (in whatever form or name)           undertaking the same mix of duties and hours
                                            for the provision of premises, equipment etc to            of work, and with the same skills, together with
                                            working directors/working beneficiaries/workers            any allowances or other remuneration paid to the
                                            which are commercially based, legally documented           working director/working beneficiary/worker for
                                            and subject to taxation are not counted as                 employee-related duties for the industry relevant
                                            remuneration. Otherwise the payment of rent to             to the work performed, for the relevant period.
                                            working directors/working beneficiaries/workers
                                            is counted as remuneration.
                                                                                                       Long service leave
                                            Leave loadings                                             Payments for long service leave, including lump
                                                                                                       sum payments, are counted as remuneration.
                                            Leave loadings and lump sum payments of leave
                                            loadings are counted as remuneration.                      See ‘Building and Construction Industry Long
                                                                                                       Service Leave Scheme’ and ‘Cleaning Industry
                                                                                                       Portable Long Service Leave Scheme’.
                                            Living-away-from-home allowance
                                            If the employer pays for or reimburses the worker
                                                                                                       Lump sum payments in lieu of holiday,
                                            for living-away-from-home allowance that the
                                            worker incurs as part of their employment (for             sick leave (and the like)
                                            items such as accommodation or meals and                   Lump sum payments in lieu of holidays, sick leave
                                            incidental expenses, such as telephone costs) and          (and the like) including leave loadings and bonuses,
                                            the payment is subject to fringe benefits tax then         are counted as remuneration.
                                            the payment is counted as remuneration.

                                            The living-away-from-home allowance is usually             Management fees
                                            paid where the worker has relocated for work               Management fees paid to working directors,
                                            purposes. For the treatment of allowances paid             working beneficiaries and workers for employment
                                            to a worker where the worker is temporarily away           related activities are counted as remuneration.
                                            from their principal place of residence see travel
                                            allowance.                                                 See also Chapter C.

                                            See ‘Travel allowance’, ‘Fringe benefits’ and
                                            ‘Allowances and expenses’.
                                                                                                       Maternity leave payments
                                                                                                       Maternity leave payments are counted as
                                                                                                       remuneration.

                                                                                                       See ‘Paid parental leave’.
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Meal allowance                                            An incorporated worker from overseas who
                                                                                                      works in NSW must take out their own workers’
                                            If the employer pays an amount intended to
                                                                                                      compensation policy. Wages, salary, fringe benefits
                                            reimburse a worker’s meal related expenses,
                                                                                                      and/or any other consideration to the incorporated
                                            or pays for or reimburses the worker for meal
                                                                                                      worker is counted as remuneration towards their
                                            related expenses, in accordance with an award at
                                                                                                      workers’ compensation policy.
                                            a rate specified by the award, then the payment
                                            is not counted as remuneration. However, any
                                            payment greater than the award rate is counted            Overseas workers
                                            as remuneration. Where the meal expense is part           (from NSW, working overseas)
                                            of a ‘living-away-from-home allowance or a travel
                                                                                                      Wages, salary, fringe benefits and/or any other
                                            allowance, refer to that section of this manual.
                                                                                                      consideration provided by an employer to any
                                            In any other case, the payment is counted as
                                                                                                      worker who is normally based in NSW, while
                                            remuneration.
                                                                                                      that worker is temporarily employed or working
                                            See ‘Fringe benefits’, ‘Entertainment expenses’           overseas, is counted as remuneration. This is to
                                            and ‘Allowances and expenses’.                            apply whether the payments are made within or
                                                                                                      outside Australia. Employers should also verify
                                                                                                      with the relevant overseas authority the legislative
                                            Mechanical and Electrical Redundancy                      requirements of that country.
                                            Trust (MERT)
                                                                                                      Where a NSW employer engages a worker to
                                            MERT payments are not counted as remuneration.
                                                                                                      work overseas, then the employer must incept a
                                            See ‘Termination payments’.                               workers’ compensation policy (or equivalent) in
                                                                                                      accordance with the legislative requirements of
                                                                                                      that country. Wages, salary, fringe benefits and/
                                            Military leave payments                                   or any other consideration to the worker is not
                                            Military leave payments are counted as                    counted as remuneration for the NSW workers’
                                            remuneration.                                             compensation policy.

                                            Over-award payments                                       Overtime payments
                                            Any payment over the award rate is counted as             Overtime payments are counted as remuneration.
                                            remuneration.
                                                                                                      Paid parental leave scheme
                                            Overseas employers                                        The Paid Parental Leave Scheme is a new
                                            An overseas employer who engages workers                  entitlement for working parents of children who
                                            in NSW must have a NSW workers’ compensation              were born or adopted on or after 1 January 2011.
                                            policy.                                                   The scheme was established under the Paid
                                                                                                      Parental Leave Act 2010 (Commonwealth). Parental
                                            Wages, salary, fringe benefits, superannuation            leave pay is available to working parents who
                                            and/or any other consideration an overseas                meet eligibility criteria and is fully funded by the
                                            employer provides a worker working in NSW, is             Australian Federal Government. Eligible working
                                            counted as remuneration.                                  parents can get 18 weeks of government funded
                                                                                                      parental leave pay at the rate of the national
                                            Overseas workers (from overseas,                          minimum wage.
                                            working in NSW)                                           The 18 weeks of Commonwealth Government
                                            Wages, salary, fringe benefits and/or any                 funded parental leave pay is not counted as
                                            other consideration an employer provides an               remuneration. Any payments in excess of Paid
                                            overseas worker working in NSW, is counted                Parental Leave Scheme entitlement are counted
                                            as remuneration. The amount to be counted                 as remuneration.
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                                            corresponds to the proportion of the wages that
                                            can be attributed to the time the worker is in NSW.       All other maternity and paternal leave payments
                                            This applies whether the payments are made within         are counted as remuneration.
                                            or outside Australia.

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Parental leave payments                                    Private use of company car
                                            Parental leave payments are counted as                     If an employer provides a worker with the private
                                            remuneration.                                              use of a company car, then the benefit is counted
                                                                                                       as remuneration.
                                            Paternity leave payments                                   See ‘Fringe benefits’ and ‘Company car’.
                                            Paternity leave payments are counted as
                                            remuneration.                                              Public and annual holiday payments
                                                                                                       (including loadings)
                                            Payments in lieu of notice
                                                                                                       Public and annual holiday payments including
                                            Payments in lieu of notice are not counted as              loadings are counted as remuneration.
                                            remuneration.

                                            See ‘Termination payments’.                                Rebatable employers
                                                                                                       All fringe benefits provided to workers are counted
                                            Payments made on behalf of the worker                      as remuneration.

                                            If the employer spends money on behalf of the              Certain employers are deemed Rebatable
                                            worker to the direct benefit of the employment             employers by the Australian Taxation Office (ATO).
                                            of the worker (e.g. a computer course, training in         These employers should declare payments less
                                            relation to employment) then the payment is not            than the threshold amount at the net value and
                                            counted as remuneration. In any other case, the            those greater than the threshold amount at the
                                            payment is counted as remuneration.                        grossed-up value.

                                            See ‘Fringe benefits’.                                     See ‘Fringe benefits’ and ‘Charities, churches and
                                                                                                       public benevolent institutions’.
                                            Penalty rates
                                            Penalty rates are counted as remuneration.                 Redundancy payments
                                                                                                       See ‘Termination payments’.
                                            Personal services income
                                            Any personal services income attributed to an              Retrenchment payments
                                            individual and not otherwise taken as salary or            See ‘Termination payments’.
                                            wages or other non-exempt form of remuneration
                                            is counted as remuneration.
                                                                                                       Reward – payment by way of
                                                                                                       Payment by way of a reward is counted as
                                            Productivity allowance
                                                                                                       remuneration.
                                            Productivity allowances including those paid in the
                                            construction industry are counted as remuneration.         See ‘Commission(s)’.

                                            Profit sharing schemes                                     Rollovers and options
                                            Benefits workers receive from profit sharing               Payments made for rollovers and options in the
                                            agreements are not usually counted as                      broadcasting and/or publishing industry where no
                                            remuneration. However, when these benefits                 additional work activities are undertaken are not
                                            are provided in lieu of wages, then the benefit            counted as remuneration.
                                            is counted as remuneration for the purposes of
                                            calculating workers’ compensation premiums.                Royalties
                                                                                                       Royalty payments are not counted as
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                                                                                                       remuneration.

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Salary                                                      If a share or option granted is classified as a fringe
                                                                                                        benefit under the Fringe Benefits Tax Assessment
                                            Salary is counted as remuneration.
                                                                                                        Act 1986 (Commonwealth), it is treated as a fringe
                                                                                                        benefit for workers’ compensation purposes.
                                            Salary package/sacrifice
                                                                                                        For further information refer to the NSW Payroll
                                            Generally, any wages, salary and the value of fringe        Tax Act 2007, Division 4, Section 18-26.
                                            benefits and any other consideration in money or
                                            money’s worth the employer provides to workers
                                            as part of a salary package or salary sacrifice
                                                                                                        Shift allowance
                                            arrangement, are counted as remuneration. In                A shift allowance is counted as remuneration.
                                            the case of fringe benefits, the amount counted
                                            is the taxable value of the benefits according to
                                                                                                        Sick leave
                                            the Fringe Benefits Tax Assessment Act 1986. See
                                            specific entries for details of particular benefits.        Sick leave is counted as remuneration.
                                            See ‘Flexible work package payments’.
                                                                                                        Lump sum payments on termination for sick leave
                                                                                                        are counted as remuneration.
                                            Salary protection insurance
                                            Payments made by an employer to a worker under              Site allowance
                                            an income protection policy, sickness or accident
                                                                                                        Site allowances are counted as remuneration.
                                            insurance policy or salary continuance policy, even
                                            if the worker contributes to the policy premium, are
                                            counted as remuneration.                                    Staff discounts and benefits
                                                                                                        Any fringe benefits that are available to workers as
                                            Severance payments                                          an incidental benefit of employment are counted as
                                                                                                        remuneration.
                                            See ‘Termination payments’.
                                                                                                        See ‘Fringe benefits’.
                                            Share of catch
                                            Where a skipper or crew of a fishing vessel is paid         Strike-breaking allowance
                                            by way of ‘share of catch’ then the value of the            A strike-breaking allowance is counted as
                                            share of catch is counted as remuneration. The              remuneration.
                                            value of remuneration is calculated by multiplying
                                            the agreed percentage (share of the catch) by the
                                                                                                        Study leave
                                            sale price of the catch.
                                                                                                        Study leave is counted as remuneration.
                                            Shares and Share options
                                                                                                        Superannuation payments
                                            Share options are counted as remuneration when
                                            these are made in lieu of wages or classified as            Chapter A indicates that Wages “includes a
                                            a fringe benefit under the Fringe Benefits Tax              superannuation benefit being money paid or
                                            Assessment Act 1986 (Commonwealth). The                     payable by the employer in respect of the worker.”
                                            granting of a share or option occurs if a person
                                                                                                        Superannuation includes; salary sacrifice amounts
                                            acquires a share, or in the case of an option, a
                                                                                                        paid to superannuation on behalf of the worker,
                                            right to the share. A value of the share or option
                                                                                                        extra superannuation payments made on behalf of
                                            becomes liable on the relevant day. The employer
                                                                                                        the worker and Superannuation Guarantee Levy
                                            can elect to treat the relevant day as either the
                                                                                                        payments made on behalf of the worker.
                                            date that the share or option is granted to the
                                            employee or the ‘vesting date’.                             Note: Superannuation payments made on behalf
                                                                                                        of non-working directors are not assessable. See
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                                                                                                        Chapter C.

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Telephone allowance                                        Tips and gratuities
                                            If the employer pays for or reimburses the worker          Tips and gratuities that employers pass on to their
                                            for telephone-related expenses in accordance               workers and are included on the worker’s payment
                                            with an award at a rate specified by the award,            summary are counted as remuneration.
                                            then the payment is not counted as remuneration.
                                            However, any payment greater than the award rate           Tool allowance
                                            is counted as remuneration.
                                                                                                       If an employer reimburses the worker for tool-
                                            Where the telephone expense is part of a ‘living-          related expenses that the worker incurs as part of
                                            away-from-home allowance or a travel allowance,            their employment, then the reimbursement is not
                                            refer to that section of this manual. In any other         counted as remuneration. In any other case, the
                                            case, the payment is counted as remuneration.              payment is counted as remuneration.

                                            See ‘Fringe benefits’ and ‘Allowances and                  See ‘Fringe benefits’ and ‘Allowances and
                                            expenses’.                                                 expenses’

                                            Termination payments                                       Traineeship schemes
                                            Payments that represent a lump sum payment of              See Chapter H.
                                            accrued sick leave, annual leave, including leave
                                            loadings or bonuses, and long service leave, made
                                                                                                       Travel allowance
                                            on termination or retirement, are counted as
                                            remuneration, including payments made on the               If the employer pays for or reimburses the worker
                                            death of a worker.                                         for travel related expenses that the worker incurs
                                                                                                       as part of their employment, then the allowance is
                                            Payments made in lieu of notice on termination             not counted as remuneration.
                                            arising from redundancy, severance, retrenchment
                                            or early retirement are not counted as                     Where the payment is made in accordance with
                                            remuneration.                                              an award at a rate specified by the award, the
                                                                                                       payment is not counted as remuneration. However,
                                            Redundancy, severance, retrenchment, early                 any payment greater than the award rate is
                                            retirement benefits or termination payments (that          counted as remuneration.
                                            do not represent accrued sick leave, annual leave,
                                            including leave loadings or bonuses, and long              If the employer provides a worker with a travel
                                            service leave) are not counted as remuneration.            allowance and the payment is not paid under an
                                                                                                       Award, then any payment up to the prescribed
                                            Contributions to the Australian Construction               amount per night is not counted as remuneration.
                                            Industry Redundancy Trust (ACIRT), Mechanical              If the payment is not under an Award, then any
                                            and Electrical Redundancy Trust (MERT)                     payment greater than the prescribed per night
                                            or Cleaning Industry Portable Long Service                 rate is counted as remuneration. Refer to https://
                                            Leave Scheme (CIPLSLS) are not counted as                  www.icare.nsw.gov.au/employers/premiums/
                                            remuneration.                                              premium-updates/ for the current motor and
                                                                                                       accommodation allowances.
                                            Ex gratia payments to workers on termination are
                                            not counted as remuneration.                               See ‘Fringe benefits’, ‘Living-away-from-home
                                                                                                       allowance’ and ‘Allowances and expenses’.

                                                                                                       Travelling time
                                                                                                       Any payment to a worker for work-related travel
                                                                                                       time is counted as remuneration.
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Trust distributions                                       Volunteers
                                            See Chapter D.                                            See ‘Honorariums’.

                                            Uniform allowance                                         Workers’ compensation payments
                                            If the employer pays for or reimburses the worker         Any workers’ compensation benefits an employer
                                            for uniform related expenses that the worker incurs       pays to a worker including the excess on the
                                            as part of their employment, then the payment is          claim which the employer pays are not counted as
                                            not counted as remuneration. In any other case, the       remuneration.
                                            payment is counted as remuneration.
                                                                                                      However, payments by an employer to an injured
                                            See ‘Clothing’, ‘Fringe benefits’ and ‘Allowances         worker over and above the workers’ compensation
                                            and expenses’.                                            benefits paid to workers by the workers’
                                                                                                      compensation Scheme Agent are counted as
                                                                                                      remuneration.

                                                                                                      Working directors’ payments
                                                                                                      See Chapter C.
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Chapter C – Directors’                                      How are dividends treated?

                                            fees and payments                                           Where the company’s constitution provides
                                                                                                        for dividend payments to members, including
                                                                                                        directors, then the payments are not usually
                                                                                                        counted as remuneration.
                                            How are fees to a ‘non-working’ director
                                            treated?                                                    However, where a dividend is paid in lieu of wages,
                                                                                                        the payment is counted as remuneration for the
                                            Any fees or payments the employer makes to a
                                                                                                        purposes of calculating workers’ compensation
                                            ‘non-working’ director for performing their duties
                                                                                                        premiums.
                                            as a director are not counted as remuneration.
                                                                                                        The amount of payment to be included is based on
                                            Non-working director’s duties include attending
                                                                                                        the hours worked and the type of work performed.
                                            board meetings, setting strategic goals and
                                                                                                        The amount is limited to the current market value
                                            overseeing and reviewing the company’s progress
                                                                                                        of the remuneration that would be paid to a worker
                                            towards those goals. A non-working director would
                                                                                                        undertaking the same mix of duties and hours
                                            have no involvement in the day-to-day operations
                                                                                                        of work, and with the same skills, together with
                                            or perform administrative functions of the business.
                                                                                                        any allowances or other remuneration paid to the
                                            Note: Superannuation payments made on behalf                director for employee-related duties.
                                            of non-working directors are not counted as
                                                                                                        To determine the current market value of the
                                            remuneration.
                                                                                                        remuneration, the employer and icare may consider
                                                                                                        various sources, including: industrial awards,
                                            How are fees to a ‘working’ director                        position vacant advertisements relevant to the
                                            treated?                                                    general location of the director, salary surveys,
                                                                                                        or evidence supplied by recruitment firms or
                                            Any director is considered to be a ‘working’
                                                                                                        employment agencies. The amount may be more
                                            director if they are performing work in the day-
                                                                                                        than in an industrial award, if activities undertaken
                                            to-day operations of the business, which include
                                                                                                        exceed those duties that would be required of a
                                            administrative and management tasks.
                                                                                                        worker under that award, for example, making
                                            Where a director is performing work in the day-             decisions that relate to the financial, strategy and/
                                            to-day operations of the business and is receiving          or management direction of the organisation.
                                            any form of consideration in money or money’s
                                                                                                        In the absence of a relevant industrial award being
                                            worth, then there is an implied contract of service
                                                                                                        appropriate, icare can rely upon the ‘average
                                            between the director and the company. That is,
                                                                                                        weekly full time adult total earnings’ in accordance
                                            the director is a working director and is therefore
                                                                                                        with statistical reports compiled by the Australian
                                            a worker for the purposes of NSW workers’
                                                                                                        Bureau of Statistics (ABS) together with an
                                            compensation legislation.
                                                                                                        allowance for the Superannuation Guarantee Levy.
                                            All payments to a working director (including
                                            allowances, fees, fringe benefits, salary,
                                            superannuation, wages etc) are counted as
                                            remuneration.

                                            Any payment or remuneration (shares, share
                                            options, dividends, trust distributions etc) that
                                            is made in lieu of wages or classified as a fringe
                                            benefit under the Fringe Benefits Tax Assessment
                                            Act 1986 (Commonwealth) should be declared as
                                            wages for workers compensation purposes.

                                            See ‘Fringe benefits’ in Chapter B for information
WI0229_Wages_declarations_manual_2021_v05

                                            on the calculation of the value of the benefits.

                                            © icareTM | Insurance and Care NSW 2021               19 of 32                               Wages Definition Manual
                                                                                                                                                               
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