How your safety record affects your WorkCover premium

Does your claims history affect your WorkCover premium in Victoria?

Yes, but only above a specific threshold: if your annual rateable remuneration is $200,000 or less, WorkSafe Victoria calculates your premium using remuneration and your industry's standard rate only — claims history doesn't come into it. Above $200,000, your WorkCover claims experience is factored in through a performance rating that compares you to other employers in your industry, and it can move your premium up or down from the industry rate.

What actually determines your premium?

WorkSafe Victoria says three factors drive what an employer pays:

1. Remuneration — how much you pay your workers (wages, salaries, superannuation and other benefits), known as your rateable remuneration.
2. Industry rate — set by WorkSafe to reflect the claims experience of your industry as a whole.
3. Performance rating — for employers above the $200,000 remuneration threshold, your own claims history relative to your industry's average.

The larger your rateable remuneration, the more weight your own claims experience carries in the calculation — small employers are much more exposed to the industry rate, while larger manufacturers feel the effect of their own safety record more directly.

How does the performance rating actually work?

If you've had a WorkCover claim, WorkSafe compares your claims experience to the average for your industry and issues a performance rating, shown on your July premium notice. Employers who perform better than their industry average get a discount against the industry rate; those who perform worse get a loading on top of it.

For the 2026-27 premium year, WorkSafe includes weekly payment costs only for claims made in the 2025 calendar year — earlier costs are excluded from that year's calculation. If a worker returns to consistent work within that same period, the estimated future cost of the claim is reduced, which in turn reduces its impact on future premiums. This is the mechanism that rewards active return-to-work management, not just avoiding claims altogether.

What counts as a "claims cost"?

WorkSafe defines claims costs as payments made in relation to a claim, including compensation payments, associated costs and expenses, settlement payments, and estimates of future payments. Importantly:

• Rejected or closed claims can still carry a cost estimate, because claims can reopen or be appealed — a cost estimate is only included in your premium calculation once compensation has actually been paid.
• Provisional payments won't affect your premium if the claim is ultimately rejected.
• Future cost estimates are modelled, using WorkSafe's data on the average lifetime cost of similar claims over 25 years, and the biggest lever on that estimate is how quickly and sustainably the worker returns to work.

Is there a cap on how much your premium can rise?

Yes. WorkSafe Victoria generally caps year-on-year premium-rate increases at 30%, applying to workplaces that continue from one year to the next in the same industry classification (including the imputed workplaces of labour hire employers). That's a ceiling, not a guarantee your premium won't rise — but it limits how much a single bad claims year can hurt you in any one premium cycle.

What this means for manufacturers managing their premium

Remuneration	Claims history affects premium?
$200,000 or less	No — industry rate and remuneration only
Over $200,000	Yes — performance rating applies, weighted by remuneration size

For manufacturers over the $200,000 threshold, the practical levers are the same ones that reduce injuries in the first place: fewer claims, and faster, more sustainable return-to-work outcomes when a claim does happen. Because WorkSafe's model rewards return-to-work speed specifically — not just claim avoidance — an injured worker who's supported back into meaningful work quickly has a measurably smaller effect on future premiums than one left on prolonged weekly payments.

Keeping your WorkSafe agent updated with current medical certificates, return-to-work plans and reimbursement requests also directly affects the accuracy of your future cost estimates, since WorkSafe applies a three-month delay before finalising each estimate to allow this information to come through. If you want a clearer picture of where your current safety record sits and what's driving your premium, a site assessment is a practical starting point — you can book one with Ardmor's team at https://ardmor.com.au/book-audit.

FAQ

Does every Victorian employer's WorkCover premium depend on their claims history? No. Only employers with annual rateable remuneration above $200,000 have their premium affected by claims history, through a performance rating. Below that threshold, premium is based on remuneration and the industry rate only.

Can my WorkCover premium increase by an unlimited amount after a bad claims year? No. WorkSafe Victoria generally caps year-on-year premium-rate increases at 30% for continuing workplaces in the same industry classification, though other factors like the deductible benefit and minimum premium can still apply.

Does getting an injured worker back to work quickly actually reduce my premium? Yes. WorkSafe's model estimates future claim costs partly based on return-to-work outcomes — the longer a worker stays away from consistent work, the higher the estimated future cost, which flows into your performance rating and premium.

This article is general information for Victorian manufacturers, not legal advice. Last updated: 10 August 2026.