WorkSafe Tasmania

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Guideline on the definition of wages A - Z

Guideline on the definition of wages


This information will assist parties who are calculating workers compensation premiums.

The basic principle adopted by WorkSafe Tasmania in deciding whether specific payments or benefits made to workers are considered to be "wages" is that, where they are made in return for the worker's labour (such as payments in cash or in kind) this constitute wages assessable for workers compensation premium calculation purposes.

Exceptions to this principle occur where:

  • there are specific exclusions under the Act
  • there is a work-related reason for the expenditure being incurred by the workers, or
  • the benefit is incidental to the worker's employment.

It is important to note that the definition relates only to wages for the establishment of premiums and has no relationship to the payment of weekly entitlements to an injured worker covered by workers compensation.

This guideline is intended to assist in the interpretation of section 96A of the Act, but should not be regarded as authoritative. It indicates the manner in which WorkSafe Tasmania interprets this section, with a view to encouraging uniform application of the section. The Guideline is not intended as legal advice, and users of the Guideline should not rely upon it, but should rely on the advice of their own legal advisers. The proper interpretation of section 96A is ultimately a matter for the Courts.


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    A

  • Guideline on the definition of wages A - Z

    Accommodation

    Included:

    • Where the employer provides free or subsidised board and lodging to a worker as part of their conditions of employment (whether express or implied).  Assessable according to current market rental value less any amount paid by the worker.
    • Company house or other accommodation provided by employer. Assessable according to current market rental value less any amount paid by the worker.
    • Housing loans - where the employer provides a loan to a worker on which a low interest rate (or no interest) has been charged and that benefit is subject to FBT.

    Not included:

    • Where temporary accommodation is provided associated with relocation.
  • Guideline on the definition of wages A - Z

    Advanced salary payments

    Included

  • Guideline on the definition of wages A - Z

    Allowances (see under specific headings)

    Included:

    • An allowance paid to a worker in particular circumstances or for a particular skill (not relating to a cost incurred by the worker) e.g. site and height allowances, supervision allowances, responsibility payments and productivity allowances.

    Not included:

    • Providing the allowance is paid to the worker to reimburse costs incurred in the course of employment.
  • Guideline on the definition of wages A - Z

    Annual leave and public holiday payment including loadings

    Included

  • B

  • Guideline on the definition of wages A - Z

    Bonuses

    Included

  • C

  • Guideline on the definition of wages A - Z

    Call out allowance

    Included

  • Guideline on the definition of wages A - Z

    Car allowance

    Not included

  • Guideline on the definition of wages A - Z

    Car expenses

    Not included:

    • Amount paid to worker as an allowance to cover work-related costs or as a reimbursement for car-related costs incurred by the worker as part of their employment.
  • Guideline on the definition of wages A - Z

    Car parking

    Included:

    • Where the employer provides car parking facilities to a worker at or near their place of employment and that benefit is subject to FBT.
  • Guideline on the definition of wages A - Z

    Clothing allowance/expenses

    Included:

    • Where the employer provides free clothing (or otherwise directly funds clothing) as a benefit to a worker and that benefit is subject to FBT.

    Not included:

    • Amount paid to worker as an allowance to cover work-related clothing costs or as a reimbursement for clothing related costs incurred by the worker as part of their employment.
  • Guideline on the definition of wages A - Z

    Commission

    Included

  • Guideline on the definition of wages A - Z

    Company car (private use of)

    Included:

    • Where the employer makes a car available for private use to a worker and that benefit is subject to FBT.
  • Guideline on the definition of wages A - Z

    Construction allowance

    Included

  • Guideline on the definition of wages A - Z

    Contractors (not deemed to be workers)

    Not included

  • D

  • Guideline on the definition of wages A - Z

    Debt forgiveness

    Included:

    • Where the employer waives or forgives a worker's debt and that benefit is subject to FBT, e.g. if an employer who has sold goods to a worker later tells the worker that they are not required to pay the amount invoiced to them.

    Not included:

    • A debt owed by a worker that is written off as a genuine bad debt.
  • Guideline on the definition of wages A - Z

    Directors - Payment to working directors

    Included

  • Guideline on the definition of wages A - Z

    Directors Fees

    Included

  • Guideline on the definition of wages A - Z

    Dirt money

    Included

  • Guideline on the definition of wages A - Z

    Dividends

    Not included

  • E

  • Guideline on the definition of wages A - Z

    Early retirement benefits

    Not included

  • Guideline on the definition of wages A - Z

    Employee share schemes that form part of an employee's salary package

    Included:

    • Options
    • Shares
    • Dividends
  • Guideline on the definition of wages A - Z

    Entertainment allowance/expenses

    Included:

    • Where the employer provides a meal or other entertainment benefit to a worker and that benefit is subject to FBT.

    Not included:

    • Amount paid to worker as an allowance to cover work-related meal or other entertainment costs or as a reimbursement for entertainment related costs incurred by the worker as part of their employment.
  • Guideline on the definition of wages A - Z

    Ex gratia payments

    Not included

  • F

  • Guideline on the definition of wages A - Z

    First aid allowance

    Included

  • Guideline on the definition of wages A - Z

    Fringe benefits (FBT)

    Included:

    • Generally, fringe benefits provided to workers are assessable as wages. For more information relating to specific items, see relevant items.
    • The value of the benefits should be calculated on the same basis as the "taxable value of fringe benefits". Note that this is the actual value of the benefit provided (as determined by the Fringe Benefits Tax Assessment Act 1986 (Cwlth)), i.e. the pre gross-up amount.

    Not included:

    • Benefits of this kind provided to an employee of a religious institution who is a religious practitioner, are not fringe benefits within the meaning of the Commonwealth Act.
  • G

  • Guideline on the definition of wages A - Z

    Gifts (that are not part of the employee's salary package)

    Not included

  • H

  • Guideline on the definition of wages A - Z

    Height money

    Included

  • Guideline on the definition of wages A - Z

    Honorariums

    Not included

  • I

  • Guideline on the definition of wages A - Z

    Industry allowances

    Included

  • L

  • Guideline on the definition of wages A - Z

    Leave (where paid by employer)

    Included:

    • Adoption
    • Annual
    • Bereavement
    • Carers
    • Jury duty
    • Long service
    • Maternity
    • Military service
    • Paternity
    • Sick
    • Study
  • Guideline on the definition of wages A - Z

    Leave loadings

    Included

  • Guideline on the definition of wages A - Z

    Living-away-from-home allowance

    Included:

    • Where an allowance is paid to a worker for being put to expense whilst away from their normal place of residence and that benefit is subject to FBT.
    • Where the allowance is paid because of personal inconvenience and lack of amenities associated with working at an isolated location and that benefit is subject to FBT.

    Not included:

    • Otherwise
  • Guideline on the definition of wages A - Z

    Loan (unless commercially based)

    Included

  • Guideline on the definition of wages A - Z

    Long service leave

    Included:

    • Payments made by an employer to or for the benefit of a worker in respect of long service leave are payments "in return for the worker's labour" and therefore assessable.
  • Guideline on the definition of wages A - Z

    Lump sum payment in lieu of holiday, sick leave

    Included:

    • Accrued entitlements, having been earned by the worker through their labour, are considered payments "in return for the worker's labour" and therefore assessable.
  • M

  • Guideline on the definition of wages A - Z

    Meal allowance

    Included

  • N

  • Guideline on the definition of wages A - Z

    Novated leases (that are subject to FBT)

    Included

  • O

  • Guideline on the definition of wages A - Z

    On call allowance

    Included

  • Guideline on the definition of wages A - Z

    Operating car leases (where the vehicle is regarded as a fringe benefit)

    Included

  • Guideline on the definition of wages A - Z

    Over award payments

    Included

  • Guideline on the definition of wages A - Z

    Overtime payments

    Included

  • P

  • Guideline on the definition of wages A - Z

    Parking (that is subject to FBT)

    Included

  • Guideline on the definition of wages A - Z

    Payments in lieu of notice

    Not included

  • Guideline on the definition of wages A - Z

    Penalty rates

    Included

  • Guideline on the definition of wages A - Z

    Private use of company car

    Included

  • Guideline on the definition of wages A - Z

    Profit sharing schemes

    Included:

    • Distribution in the form of a bonus, i.e. in respect of something extra in addition to a dividend or wages or subject to income tax or FBT.
    • A benefit from a profit sharing agreement which is subject to income tax or FBT.

    Not included:

    • Otherwise
  • Guideline on the definition of wages A - Z

    Public holiday payments

    Included

  • R

  • Guideline on the definition of wages A - Z

    Redundancy payments

    Not included:

    • See termination payments
  • Guideline on the definition of wages A - Z

    Relocation allowance

    Not included

  • Guideline on the definition of wages A - Z

    Retrenchment payments

    Not included:

    • See termination payments
  • Guideline on the definition of wages A - Z

    Royalties

    Not included

  • S

  • Guideline on the definition of wages A - Z

    Salary

    Included

  • Guideline on the definition of wages A - Z

    Salary continuancy (that is subject to FBT)

    Included

  • Guideline on the definition of wages A - Z

    Salary packaging

    Included:

    • Wages, salary and the value of fringe benefits provided to workers as components of a "salary package" are generally assessable. In the case of fringe benefits, the assessable amount is the taxable value of the benefits according to the Fringe Benefits Tax Assessment Act 1986 (Commonwealth).
  • Guideline on the definition of wages A - Z

    Salary sacrificed amounts

    Included

  • Guideline on the definition of wages A - Z

    Severance payments

    Not included:

    • See termination payments
  • Guideline on the definition of wages A - Z

    Shift allowance

    Included

  • Guideline on the definition of wages A - Z

    Sick leave

    Included

  • Guideline on the definition of wages A - Z

    Site allowance

    Included

  • Guideline on the definition of wages A - Z

    Staff discounts

    Not included:

    • Where available to all workers as an incidental benefit of employment by that employer.
  • Guideline on the definition of wages A - Z

    Study assistance (where regarded as a fringe benefit)

    Included

  • Guideline on the definition of wages A - Z

    Superannuation contributions and benefits

    Included:

    • Employer superannuation contributions which are made by way of salary sacrifice from a worker's salary package.
    • Workers superannuation contributions only if salary-sacrificed (these contributions form part of a worker's gross wages and are generally deducted from these wages. The gross wages figure should be declared in this situation).

    Not included:

    • Employer superannuation contributions required by law, e.g. Superannuation Guarantee (Administration) Act 1992 (Commonwealth).
    • Superannuation benefits paid to workers from superannuation funds.
  • T

  • Guideline on the definition of wages A - Z

    Telephone expenses

    Included:

    • Where the employer provides free telephone services to a worker and that benefit is subject to FBT.

    Not included:

    • Amount paid to worker as an allowance to cover work-related telephone costs or as a reimbursement for telephone related expenses incurred by the worker as part of their employment.
  • Guideline on the definition of wages A - Z

    Termination payments

    Included:

    • Payments made on termination in satisfaction of accrued entitlements for annual leave, sick leave and long service leave are not considered to be termination payments. These are payments earned through the worker's labour and are therefore payments within the meaning of section 96A.

    Not included:

    • Refers to monies paid in consideration or compensation for the termination of employment.
  • Guideline on the definition of wages A - Z

    Third party remuneration (e.g. school fees)

    Included

  • Guideline on the definition of wages A - Z

    Tips and gratuities

    Included

  • Guideline on the definition of wages A - Z

    Tool allowance

    Not included

  • Guideline on the definition of wages A - Z

    Travel allowance

    Not included

  • Guideline on the definition of wages A - Z

    Travel expenses

    Included:

    • Free or discounted travel available to workers, e.g. employees of airlines or travel agents.
    • Where the expense is otherwise paid, e.g. as a form of additional remuneration or bonus.

    Not included:

    • Payments to workers to reimburse work-related costs.
  • Guideline on the definition of wages A - Z

    Trust distributions

    Included:

    • Directors of corporate trustee.
    • Employed beneficiary (where distribution is for work performed).
  • U

  • Guideline on the definition of wages A - Z

    Uniform (where provision of free clothing is subject to FBT)

    Included

  • W

  • Guideline on the definition of wages A - Z

    Workers compensation payments and reimbursements

    Not included