ReturnToWorkSA's insurance premium system applies to all registered employers regardless of their size.
Your insurance premium is calculated using the remuneration you pay to workers, your industry premium rate and the income support costs paid to your worker/s with time lost claims.
Premium = BP x (1 – D) + C – A + SUR + GST + WHS
Where:
BP = Base Premium (remuneration x industry premium rate)
D = Discount factor
C = Claims costs
A = Apprentice incentive
SUR = Supplementary Underwriting Rate (to allow adjustment of premium)
GST = Goods and Services Tax
WHS = Work Health and Safety registration fee (collected on behalf of SafeWorkSA)
Base premium is calculated by multiplying your total remuneration (actual or estimated) by your industry premium rate. For employers with multiple locations, the base premiums will be added together.
An employer with no claims will pay the discounted premium. An employer with time lost claims will have the income support costs from the previous year added to the discounted premium, capped at a maximum of three times the discount applied.
The cost of claims are those costs paid in the financial year preceding the premium period, for claims with a date of injury in the previous three financial years, as demonstrated in the table below.
Cost of claims applied to insurance premium calculations
| 2023-24 premium year | 2024-25 premium year | 2025-26 premium year |
|---|
| Cost of income support paid in 2022-23 | Cost of income support paid in 2023-24 | Cost of income support paid in 2024-25 |
For claims with a date of injury in:
2022-23
2021-22
2020-21 | For claims with a date of injury in:
2023-24
2022-23
2021-22 | For claims with a date of injury in:
2024-25
2023-24
2022-23 |
2022-23 premium year
Cost of income support paid in 2022-23
2023-24 premium year
Cost of income support paid in 2023-24
2024-25 premium year
Cost of income support paid in 2024-25
2022-23 premium year
For claims with a date of injury in:2022-232021-222020-21
2023-24 premium year
For claims with a date of injury in:2023-242022-232021-22
2024-25 premium year
For claims with a date of injury in:2024-252023-242022-23
The same income support costs will not be used in more than one year.
The cost of claims will only include income support paid in the premium calculation, excluding:
- unrepresentative injuries
- income support costs associated with successfully prosecuted fraud claims
- income support payments for the first 2 weeks of incapacity where the employer has met their responsibilities under the Act to forward a claim within 5 days.
The use of income support costs aligns with our key focus of return to work, which can be directly influenced by an employer through provision of suitable duties and proactive return to work strategies.
Note: new employers (who are not subject to a transfer of business) will be required to have 1 full financial year paying base premium before the Return to Work Premium System will apply.
Premium calculation examples
Example 1: employer with no time lost claims and no apprentices
Remuneration (R) = $450,000
Industry Premium Rate (IPR) = 2%
Base Premium (BP) = $450,000 x 2% = $9,000
Discount factor (D) is 0.05 (5%)
Discount amount is $9,000 x 0.05 = $450
Discounted premium is $9,000 - $450 = $8,550
Premium payable is $8,550 + GST + WHS
Example 2: same employer with cost of claims totalling $2,500
Remuneration (R) = $450,000
Industry Premium Rate (IPR) = 2%
Base Premium (BP) = $450,000 x 2% = $9,000
Discount factor (D) is 0.05 (5%)
Discount amount is $9,000 x 0.05 = $450
Discounted premium is $9,000 - $450 = $8,550
Cost of claims of $2,500 are then added to the discounted premium subject to a maximum
= 3 x D x BP
Maximum cost of claims is 3 x 0.05 x $9,000 = $1,350
In this example, premium is capped by the maximum cost of claims, the cost of claims increase has been reduced by $1,150 Premium is $8,550 + $1,350 = $9,900
Premium payable is capped at $9,900 + GST + WHS
Example 3: different employer with cost of claims totalling $5,000
Remuneration (R) = $1,000,000
Industry Premium Rate (IPR) = 6%
Base Premium (BP) = $1,000,000 x 6% = $60,000
Discount factor (D) is 0.15 (15%)
Discount amount is $60,000 x 0.15 = $9,000
Discounted premium is $60,000 - $9,000 = $51,000
Cost of claims of $5,000 are then added to the discounted premium subject to a maximum
= 3 x D x BP
Maximum cost of claims is 3 x 0.15 x $60,000 = $27,000
In this example, the cost of claims is under the maximum cost of claims so the whole $5,000 of costs is added to the discounted premium.
Premium is $51,000 + $5,000 = $56,000
Premium payable is $56,000 + GST + WHS
WHS fee
The Workplace Health and Safety (WHS) fee is collected by ReturnToWorkSA on behalf of SafeWorkSA.
This fee is added to the ReturnToWorkSA premium and covers costs associated with work health and safety activities undertaken by the state government.
The WHS fee is not subject to GST.
Employer claim summary reports
Employer claim summary reports are sent quarterly commencing in September, providing details of your claims and the associated costs. These reports are issued to all employers with claims and will allow you to monitor your time lost claims.
FAQs
The amount you pay for your health insurance every month. In addition to your premium, you usually have to pay other costs for your health care, including a deductible, copayments, and coinsurance. If you have a Marketplace health plan, you may be able to lower your costs with a premium tax credit.
What does your premium mean? ›
An insurance premium is the amount of money an individual or business pays for an insurance policy. Insurance premiums are paid for policies that cover healthcare, auto, home, and life insurance. Once earned, the premium is income for the insurance company.
What is the definition of a premium? ›
Broadly speaking, a premium is a price paid for above and beyond some basic or intrinsic value. Relatedly, it is the price paid for protection from a loss, hazard, or harm (e.g., insurance or options contracts). The word "premium" is derived from the Latin praemium, where it meant "reward" or "prize."
How is your premium determined? ›
You pay insurance premiums for policies that cover your health, car, home, life, and others. Insurance premiums vary depending on your age, the type of coverage, the amount of coverage, your insurance history, and other factors. Premiums can increase each time you renew an insurance policy.
What is your understanding of a premium? ›
: a sum over and above a regular price paid chiefly as an inducement or incentive. c. : a sum in advance of or in addition to the nominal value of something.
What is a premium example? ›
premium noun [C] (EXTRA)
something extra given or an extra amount charged: You get a lipstick as a premium with the purchase of this makeup. Our customers are willing to pay a premium for a superior product. If you get something at a premium, you pay a high price for it, esp.
What does as a premium mean? ›
1. at a value or price higher than normal. 2. very valuable, usually because of scarcity. See full dictionary entry for premium.
What is the meaning of our premium? ›
1. an amount paid in addition to a standard rate, price, wage, etc; bonus. 2. the amount paid or payable, usually in regular instalments, for an insurance policy.
What is premium in life? ›
What is Premium in a Life Insurance Policy? Premium in life insurance refers to the amount that a policyholder will pay either in a lump sum or regularly to purchase the insurance policy. It is also known as policy premium. The insurers normally provide monthly or annual premium amounts for the life insurance plans.
What is the literal meaning of premium? ›
Premium comes straight out of Latin, meaning “reward.” It was first used as an adjective around 1925, in the phrase "premium butter." Definitions of premium. adjective. having or reflecting superior quality or value. “premium gasoline at a premium price”
The amount you pay for your health insurance every month. In addition to your premium, you usually have to pay other costs for your health care, including a deductible, copayments, and coinsurance. If you have a Marketplace health plan, you may be able to lower your costs with a premium tax credit.
What makes up a premium? ›
The total insurance premium is made up of a number of charges which may include some or all of the following (depending on a number of factors): The amount the insurer charges for accepting to cover the risk. Terrorism charges – if applicable to the risk.
Is premium a profit or loss? ›
The profit earned from the issuance of shares at premium is called as capital profit and is credited to a separate account which is known as the Securities Premium Account. The company has the option to call the premium amount anytime without any call.
What does my premium mean? ›
The amount you pay for your health insurance every month. In addition to your premium, you usually have to pay other costs for your health care, including a deductible, copayments, and coinsurance.
What is the purpose of a premium? ›
Definition: Premium is an amount paid periodically to the insurer by the insured for covering his risk. Description: In an insurance contract, the risk is transferred from the insured to the insurer. For taking this risk, the insurer charges an amount called the premium.
How do you describe something premium? ›
as in expensive. commanding a large price lavish feasts at which premium wines flowed freely. expensive. valuable. costly.
What does the premium stand for? ›
Definition: Premium is an amount paid periodically to the insurer by the insured for covering his risk. Description: In an insurance contract, the risk is transferred from the insured to the insurer. For taking this risk, the insurer charges an amount called the premium.
Does premium mean good quality? ›
As an adjective, premium implies something of superior quality that probably costs more too. Premium comes straight out of Latin, meaning “reward.” It was first used as an adjective around 1925, in the phrase "premium butter." Definitions of premium. adjective. having or reflecting superior quality or value.
What does increase your premium mean? ›
Car accidents and traffic violations are common explanations for an insurance rate increase, but other reasons why your car insurance rate can go up include changing your address, adding a new vehicle or driver, increases to claims in your ZIP code, and increases to car repair/replacement cost.
