Workers compensation insurance: how it works in every state
Workers compensation insurance is compulsory for almost every Australian employer, and each state and territory runs its own scheme with its own insurer, rules and premium rates. The schemes' published average rates for 2026-27 run from $1.343 per $100 of wages in Queensland to 2.18% of wages in Tasmania, though each is measured on its own wage base. Workers' compensation pays your workers' wages and medical costs if they are injured or become ill because of their work, and protects the business from being sued for the full cost. You insure under the scheme where your workers are based: in NSW, Victoria, Queensland and South Australia a government insurer or scheme provides the cover, while in WA, Tasmania, the ACT and the NT you buy from licensed private insurers.
Workers comp covers employees, not owners. A sole trader or partner isn't covered for their own injuries in any state, although Queensland sells an optional policy for them and WA lets companies cover working directors. This page compares the eight schemes, shows where to get a policy in each, explains how premiums are set and who counts as a worker, then links to a detailed guide for each state and territory.
By Better Rate Mate Editorial Team · Last reviewed
General advice only. It doesn't consider your circumstances. Read the PDS and TMD before you decide.
The eight schemes at a glance
The table sets out who provides cover, who regulates it, who must insure and where to get a policy in each state and territory. The schemes' own average premium rates are in the next section.
| State | Who provides the cover | Regulator | Who must insure | Where to get a policy |
|---|---|---|---|---|
| NSW | icare (Workers Insurance, the Nominal Insurer), with claims managed by Allianz, EML, GIO, Gallagher Bassett and QBE; specialised insurers and self-insurers | SIRA | Employers, unless wages are $7,500 or less a year with no apprentices or trainees and not part of a group | Take out a policy with icare |
| VIC | WorkSafe Victoria, through its agents | WorkSafe Victoria | Employers paying more than $7,500 a year in remuneration, or with any apprentice; register within 60 days | Register with WorkSafe Victoria |
| QLD | WorkCover Queensland (the only insurer) or licensed self-insurers | Workers' Compensation Regulator | Every employer of workers; apply within 5 business days of employing | Apply with WorkCover Queensland |
| WA | Private insurers licensed by WorkCover WA | WorkCover WA | Every employer, for all workers | Any insurer on WorkCover WA's licensed insurers list, or through a broker |
| SA | ReturnToWorkSA, with claims agents EML and Gallagher Bassett | ReturnToWorkSA | Employers paying $16,806 or more in 2026-27; register within 14 days of employing | Register with ReturnToWorkSA |
| TAS | Private insurers licensed by the WorkCover Tasmania Board | WorkSafe Tasmania | Every employer that isn't a self-insurer | Any insurer on WorkSafe Tasmania's licensed insurers list, or through a broker |
| ACT | Five approved private insurers | WorkSafe ACT | Every employer, for all workers | Any insurer on WorkSafe ACT's approved insurers list, or through a broker |
| NT | Five approved private insurers | NT WorkSafe | Any employer of a worker (PAYG test) | Any insurer on NT WorkSafe's approved insurers list, or through a broker |
Average premium rates by scheme, 2025-26 and 2026-27
Five schemes publish a scheme-wide average or suggested premium rate each year. Victoria, Queensland and South Australia held theirs steady for 2026-27, Western Australia's recommended average rose, and Tasmania's suggested average rose. NSW publishes a rate for each industry instead of an average, and it has kept those rates at 2025-26 levels.
The averages are only a guide to the scheme as a whole. Your premium is your wages multiplied by your own industry's rate, adjusted for claims once you're large enough, and each state page shows the rates for common small-business industries.
| Scheme | 2025-26 | 2026-27 | What the figure is |
|---|---|---|---|
| NSW (icare) | No average published | No average published | icare sets a rate for each industry; 2026-27 rates are held at 2025-26 levels |
| VIC (WorkSafe Victoria) | 1.8% | 1.8% | Average premium rate, % of rateable remuneration |
| QLD (WorkCover Queensland) | $1.343 per $100 | $1.343 per $100 | Target average premium rate, per $100 of wages |
| WA (WorkCover WA) | 1.823% | 1.931% | Average recommended rate, % of wages; insurers set the actual price |
| SA (ReturnToWorkSA) | 1.85% | 1.85% | Average premium rate; 2026-27 is the fourth year at 1.85% |
| TAS | 2.06% | 2.18% | Suggested average rate, % of wages excluding GST; insurers set the actual price |
| ACT | Not shown | Not shown | Approved private insurers set premiums |
| NT | None published | None published | Private insurers set premiums; NT WorkSafe doesn't regulate them |
Workers compensation in each state and territory
Each page sets out that scheme's rules from the regulator's and insurer's own sites: who insures, who must register, how premiums are worked out and how to get a policy.
Who has to take out workers compensation
business.gov.au lists workers compensation among the insurance you need by law if you have employees, and says employers must get it from an authorised insurer. Beyond that, each state decides the details. Most require cover from the first worker. NSW and Victoria exempt employers with very small wage bills of $7,500 a year or less, provided there are no apprentices or trainees (NSW also excludes businesses in a group), and South Australia's registration threshold is set each year ($16,806 for 2026-27).
Deadlines differ too. Queensland expects an application within 5 business days of starting to employ, South Australia within 14 days, and Victoria within 60 days of first becoming eligible. In NSW, cover starts when the policy is issued and can't be backdated, so it needs to be in place before anyone starts work. Commonwealth government agencies and some large national employers are covered by the separate Comcare scheme instead.
How premiums are calculated
Every scheme starts from the same idea: your premium is your wages bill multiplied by a rate for your industry, then adjusted for your own claims experience once the business is large enough for that to be meaningful. The names differ. NSW and Queensland call the industry categories WICs, WA uses Premium Rating Codes based on ANZSIC industries, and South Australia applies a formula with discounts for size and a charge for past income support costs.
Small businesses are usually priced mostly on their industry. In NSW, an employer whose Average Performance Premium is $30,000 or less has a premium that isn't changed by the number of claims it makes. In Victoria, claims don't affect the premium of an employer with rateable remuneration under $200,000. Queensland uses a simplified model for businesses with $1.5 million or less in wages and experience-based rating above that. In the private insurer states, insurers set their own prices, which is why comparing quotes there can pay off.
Two things you control make the biggest difference. The first is your industry classification: being placed in the wrong category can mean paying the wrong rate for years, so check it. The second is your wages declaration, which drives the premium and is adjusted to your actual wages at the end of the period.
Contractors: when they count as your workers
An ABN doesn't decide whether someone is your worker. Every scheme has its own test, and a contractor who mainly supplies their own labour, works under your direction and doesn't run their own business can be a worker in law. If they are, you need to cover them, and if you don't, you can be pursued for the unpaid premium.
The tests are set state by state: SIRA has a worker or contractor tool in NSW, WorkSafe Victoria asks whether you control what and how the work is done and whether the contractor's business depends on you, Queensland applies four tests in order, WA has an extended definition of worker, and the NT uses the ATO's PAYG employee test. Each state page explains its version.
Sole traders, partners and working directors
Workers compensation insures an employer's workers. If you're a sole trader or partner, you aren't your own employee, and business.gov.au is clear that workers compensation doesn't cover sole traders, who need their own accident and illness cover. The exceptions are about options, not automatic cover: WorkCover Queensland sells optional Workplace Personal Injury Insurance to self-employed people, directors, partners and trustees, and in WA a company can choose to cover its working directors. In Victoria, if your own company employs you, you are its worker and it must register.
See insurance for sole traders for how personal accident and illness cover and income protection fill the gap.
When a worker is injured: the employer's steps
Every scheme expects you to tell the insurer quickly and to help the worker back to work, but the deadlines differ and some are offences if you miss them. These are the first steps each state sets for employers. The state pages cover the rest.
Most states also restrict dismissing an injured worker. NSW makes it an offence to dismiss a worker within 6 months because they're unfit for work as a result of the injury, Queensland bars dismissal solely or mainly because of the injury within 12 months, WA sets a 12-month employment obligation period, the NT makes dismissal an offence for 6 months from the injury, and Victoria requires you to provide suitable or pre-injury work for 52 weeks of incapacity where it's reasonable.
| State | Tell the insurer | Other duties |
|---|---|---|
| NSW | Notify your insurer within 48 hours of becoming aware of a work-related injury | Keep a register of injuries; employers with an average performance premium over $50,000 need a return to work program and coordinator |
| VIC | Forward a claim for weekly payments to your agent within 10 calendar days; give early notice of a mental injury claim within 3 business days | Keep a register of injuries; provide suitable or pre-injury work for 52 weeks of incapacity where reasonable |
| QLD | Report the injury to WorkCover within 8 business days of becoming aware of it | Provide suitable duties if you can; don't dismiss solely or mainly because of the injury within 12 months |
| WA | Pass the claim form and first certificate of capacity to your insurer within 7 days | Have an injury management system; give 28 days' written notice before dismissing an injured worker within 12 months |
| SA | Help the worker lodge a claim within 5 business days of being told they intend to claim | Appoint a return to work coordinator if you have 30 or more SA staff; generally give 28 days' notice of a proposed termination |
| TAS | Notify your insurer within 3 working days of becoming aware of an injury likely to cause incapacity, and of receiving a claim | Give suitable alternative duties; keep injury and claim records for 7 years |
| ACT | Notify your insurer within 48 hours of becoming aware of the injury | Keep a register of injuries at the workplace |
| NT | Forward a claim to your insurer within 3 working days of receiving it | Propose a written return to work plan within 7 days once incapacity looks likely to exceed 28 days |
How long weekly payments can last
Each scheme sets its own limit on weekly payments (income support), and most tie longer payments to the worker's level of permanent impairment. Payments also stop earlier if the worker returns to work or the claim ends for another reason.
| State | General limit | Longer payments |
|---|---|---|
| NSW | 260 weeks (5 years) | No 260-week limit for permanent impairment above 20%. Primary psychological injuries notified from 1 July 2026 have their own limits, starting at 130 weeks |
| VIC | 130 weeks | To retirement age only with no capacity for work likely to continue indefinitely and, for claims reaching 130 weeks from 31 March 2024, whole person impairment of 21% or more |
| QLD | 5 years, or until the maximum amount payable is reached, whichever comes first | None beyond those limits |
| WA | No set number of weeks: payments step down to 85% after 26 weeks and stop at a total dollar limit | The limit is a total amount, the income compensation general limit amount |
| SA | 104 weeks (100% for 52 weeks, then 80%) | Seriously injured workers (whole person impairment of 30% or more for psychiatric injury, 35% or more for physical injury) can get support to retirement age |
| TAS | 9 years with impairment under 15% | 12 years (15% to under 20%), 20 years (20% to under 30%), or to pension age (30% or more) |
| ACT | To pension age | Only 2 years if the worker was within 2 years of pension age, or older, when first incapacitated |
| NT | 260 weeks in total, including the first 26 | To retirement or pension age with impairment of 15% or more; 104 weeks if injured within 2 years of that age |
What workers comp covers, and what it doesn't
The scheme pays the benefits the state's Act sets out, such as weekly payments while a worker can't work, reasonable medical and rehabilitation costs, and in some cases lump sums and death benefits. The employer's role is to hold the policy, report injuries promptly and support the worker's return to work.
Workers comp doesn't cover injury to customers or the public, which is public liability; it doesn't cover the owner of an unincorporated business; and in the ACT and elsewhere it doesn't stop a regulator pursuing you for being uninsured. Work health and safety fines are separate again and can't be insured at all under the model WHS laws.
Is WorkCover the same as workers compensation?
Yes and no. Workers compensation (workers comp) is the insurance every state requires employers to hold. WorkCover is a name some schemes use, and what it refers to depends on the state, so a search for "WorkCover" can lead to an insurer, a regulator or a body that no longer exists.
- Queensland: WorkCover Queensland is the insurer. It is the only workers compensation insurer for employers that don't self-insure, and the Workers' Compensation Regulator oversees the scheme. See WorkCover QLD.
- Victoria: WorkSafe Victoria calls its workers compensation cover WorkCover insurance, and you register for it through one of WorkSafe's agents. See WorkCover Victoria.
- Western Australia: WorkCover WA is the regulator, not an insurer. You buy a policy from one of the private insurers it licenses. See WorkCover WA.
- New South Wales: WorkCover NSW no longer exists. icare says it was replaced in 2015 by three agencies: icare (the insurer), SIRA (the regulator) and SafeWork NSW. See workers compensation in NSW.
- Tasmania: the WorkCover Tasmania Board licenses the private insurers, and WorkSafe Tasmania regulates the scheme. The other schemes don't use the WorkCover name: ReturnToWorkSA in South Australia, WorkSafe ACT and NT WorkSafe.
Which workplace injuries lead to the longest claims
Mental health conditions. Safe Work Australia's Key Work Health and Safety Statistics Australia 2025 (released 16 October 2025) shows serious claims for mental health conditions had a median of 35.7 weeks off work in 2023-24, almost five times the 7.4 weeks across all serious claims, and median compensation of $67,400 against $16,300. They made up 12.0% of serious claims, 17,600 claims, up 14.7% in a year.
Psychological injury claims are also the ones schemes test most closely. Every scheme can accept a psychological injury that work caused, but most exclude one caused by reasonable management action taken in a reasonable way, such as performance management, discipline or a transfer handled properly. Queensland's Act, for example, says an injury must have employment as a significant contributing factor, and excludes a psychiatric or psychological disorder arising from reasonable management action taken in a reasonable way.
For an employer, the practical steps are the same as for any injury: report it to your insurer within your state's deadline (see the employer's steps above), keep in touch with the worker, and offer suitable duties when their doctor says they can return. Early reporting and a return to work plan are what every scheme asks of you, whatever the injury.
| Injury or disease (major group) | Serious claims | Share of claims | Median time lost | Median compensation paid |
|---|---|---|---|---|
| Mental health conditions | 17,600 | 12.0% | 35.7 weeks | $67,400 |
| Injury to nerves and spinal cord | 230 | 0.2% | 15.3 weeks | $43,500 |
| Musculoskeletal and connective tissue diseases | 22,500 | 15.3% | 12.9 weeks | $24,300 |
| Fractures | 15,200 | 10.4% | 10.0 weeks | $20,900 |
| Traumatic joint, ligament, muscle and tendon injuries | 53,300 | 36.4% | 7.4 weeks | $15,900 |
| Wounds, lacerations, amputations and internal organ damage | 21,200 | 14.4% | 3.6 weeks | $10,200 |
| All serious claims | 146,700 | 100% | 7.4 weeks | $16,300 |
General advice only. This information doesn't take into account your objectives, financial situation or needs. Consider whether the product is right for you and read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) before you decide. We don't compare every product in the market, and we may earn a commission if you take up a product through our links.
What to watch for
- Get cover in place before the first shift. In NSW a policy can't be backdated, and every scheme penalises uninsured employers.
- Check your industry classification every year. It sets your rate.
- Declare wages honestly. Understating them to cut the premium is an offence in every state and is adjusted at the end of the period.
- Apply your state's worker test to regular contractors before you assume they are outside the scheme.
- If you employ people in more than one state, you may need a policy in each.
Common questions
Is workers compensation insurance compulsory in Australia?
Yes, for almost every employer. Each state and territory requires employers to insure their workers. NSW and Victoria exempt employers with $7,500 or less a year in wages and no apprentices or trainees, and South Australia doesn't require registration below its annual threshold ($16,806 for 2026-27).
How much does workers compensation insurance cost?
Your wages multiplied by your industry's rate, adjusted for claims experience in larger businesses. Published 2026-27 averages include 1.8% in Victoria, $1.343 per $100 of wages in Queensland, 1.85% in South Australia, 1.931% recommended in WA and 2.18% suggested in Tasmania, but your industry rate may be far higher or lower.
Do sole traders need workers compensation?
Not for themselves: workers comp doesn't cover a sole trader's own injuries. A sole trader who employs anyone, including an apprentice or a contractor who counts as a worker, must insure those workers.
Can I choose my workers compensation insurer?
In WA, Tasmania, the ACT and the NT, yes: you buy from any licensed or approved private insurer. In Queensland, WorkCover Queensland is the only insurer. In NSW and South Australia the government scheme insures you, and in Victoria you choose one of WorkSafe's agents when you register.
Do I need workers comp for contractors?
Sometimes. Each state has a test for when a contractor is legally a worker, and an ABN doesn't settle it. Contractors who mainly supply their own labour under your direction are the most likely to count.
How long can you stay on workers' compensation in Australia?
It depends on the state. The general limits are 260 weeks in NSW, 130 weeks in Victoria, 5 years or a maximum amount in Queensland, 104 weeks in South Australia, 260 weeks in the NT and up to pension age in the ACT. WA has a total dollar limit instead of a number of weeks, and Tasmania's limit depends on the level of impairment. Most states allow longer payments for workers with a high level of permanent impairment.
Are psychological injuries such as stress covered by workers comp?
They can be, in every state, if work caused the injury. Most schemes exclude a psychological injury caused wholly or mainly by reasonable management action, such as performance management, discipline or a transfer carried out reasonably. Victoria also excludes stress or burnout from events that are usual and reasonably expected in the job, and NSW changed its rules for primary psychological injuries notified from 1 July 2026.
Is workers compensation insurance tax deductible?
The ATO lists workers compensation premiums among the operating expenses a business can generally deduct. Check your situation with your accountant.
Is WorkCover the same as workers compensation?
WorkCover is a name for workers compensation in some states, but it means different things. WorkCover Queensland is the insurer, WorkSafe Victoria calls its cover WorkCover insurance, WorkCover WA is the regulator rather than an insurer, and WorkCover NSW was replaced in 2015 by icare, SIRA and SafeWork NSW.
What is the hardest workplace injury to claim for?
Psychological injuries are the slowest and costliest. Safe Work Australia's 2025 statistics show serious claims for mental health conditions had a median of 35.7 weeks off work in 2023-24, against 7.4 weeks for all serious claims, and most schemes exclude a psychological injury caused by reasonable management action.
Can a worker go on holiday while on workers' comp?
It depends on the scheme and the worker's recovery plan, so there is no single rule. A worker who is thinking of travelling should talk to their insurer or claims agent and their treating doctor before booking, because weekly payments depend on current medical certificates and the return to work plan. Each state page links that scheme's own guidance.
We are not a workers compensation insurer
Better Rate Mate is a comparison and information site, not a scheme, insurer or regulator. This page is general information for employers. For a policy, premium or claim, contact your state's scheme or a licensed insurer directly.