Reporting workers' compensation payments

A registered employer is required to pay the levy based on the total ordinary pay received by each covered worker during each quarter.

A worker’s ordinary pay includes compensation payments under the Workplace Injury Rehabilitation and Compensation Act 2013 (WorkCover payments) or any other payments in the nature of compensation for injury suffered in relation to work. It does not matter whether the insurer or the employer pays the worker the compensation, it is still considered ordinary pay.

How to report workers' compensation payments

Workers receiving workers’ compensation payments from the insurer via the employer are to be recorded with the worker's contracted hours and the payment the worker received.

From 1 July 2022, workers receiving workers’ compensation payments from the insurer directly paid to the worker are to be recorded with the worker’s contracted hours and the payment the worker received.

An employer’s obligation to record workers’ compensation hours and pay to the Authority ends when:

the worker’s compensation payments end (following receipt of a lump sum payout or the worker returns to work with the current or different employer) OR
when a worker's employment is terminated for reasons other than incapacity due to an injury for which they are entitled to compensation for.

Where a worker receives workers’ compensation payments but has no fixed hours of work, they shall only be credited for the average weekly hours worked in the 52 weeks immediately before the workers’ compensation payment started.

Where a worker has been employed for less than 12 months, they shall only be credited for the average weekly hours since their employment began immediately before the workers’ compensation payment started.

How to calculate the average hours

Calculate the average weekly hours since the worker commenced work immediately before their workers compensation payment started. This will provide you with average weekly hours for a quarter.

Step 1: Add the number of hours worked in the last 52 weeks to the number of hours of paid and/or unpaid leave in the last 52 weeks.

Step 2: Divide your answer by 52, this will provide you with average weekly hours for a year.

Step 3: Multiply your answer by 13, this will provide you with average weekly hours for a quarter.

Average calculation example

In the last 52 weeks a worker has 676 hours worked and no hours of paid and/or unpaid leave = 676.

676 divided by 52 = 13 (normal weekly hours for the purpose of workers compensation).

Multiply 13 by 13 = 169 (normal hours worked in the quarter for the purposes of workers compensation).

Once the average weekly hours are calculated, these are credited with the workers’ compensation payment they received during that quarter. Add the comment “workers compensation” on your quarterly return.

For further information contact our Customer Service team by phoning 1800 517 158 or emailing enquiries@plsa.vic.gov.au.