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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Guideline on the definition of wages A - Z
Last updated: 29 October 2019Accommodation
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
Last updated: 29 October 2019Advanced salary payments
Included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Allowances (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
Last updated: 29 October 2019Annual leave and public holiday payment including loadings
Included
B
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Bonuses
Included
C
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Call out allowance
Included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Car allowance
Not included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Car 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
Last updated: 29 October 2019Car 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
Last updated: 29 October 2019Clothing 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
Last updated: 29 October 2019Commission
Included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Company 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
Last updated: 29 October 2019Construction allowance
Included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Contractors (not deemed to be workers)
Not included
D
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Debt 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
Last updated: 29 October 2019Directors Fees
Included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Directors - Payment to working directors
Included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Dirt money
Included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Dividends
Not included
E
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Early retirement benefits
Not included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Guideline on the definition of wages A - Z
Last updated: 29 October 2019Entertainment 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
Last updated: 29 October 2019Ex gratia payments
Not included
F
Guideline on the definition of wages A - Z
Last updated: 29 October 2019First aid allowance
Included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Fringe 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
Last updated: 29 October 2019Gifts (that are not part of the employee's salary package)
Not included
H
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Height money
Included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Honorariums
Not included
I
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Industry allowances
Included
L
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Leave loadings
Included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Leave (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
Last updated: 29 October 2019Living-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
Last updated: 29 October 2019Loan (unless commercially based)
Included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Long 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
Last updated: 29 October 2019Lump 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
Last updated: 29 October 2019Meal allowance
Included
N
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Novated leases (that are subject to FBT)
Included
O
Guideline on the definition of wages A - Z
Last updated: 29 October 2019On call allowance
Included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Operating car leases (where the vehicle is regarded as a fringe benefit)
Included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Over award payments
Included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Overtime payments
Included
P
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Parking (that is subject to FBT)
Included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Payments in lieu of notice
Not included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Penalty rates
Included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Private use of company car
Included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Profit 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
Last updated: 29 October 2019Public holiday payments
Included
R
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Redundancy payments
Not included:
- See termination payments
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Relocation allowance
Not included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Retrenchment payments
Not included:
- See termination payments
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Royalties
Not included
S
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Salary
Included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Salary continuancy (that is subject to FBT)
Included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Salary 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
Last updated: 29 October 2019Salary sacrificed amounts
Included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Severance payments
Not included:
- See termination payments
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Shift allowance
Included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Sick leave
Included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Site allowance
Included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Staff 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
Last updated: 29 October 2019Study assistance (where regarded as a fringe benefit)
Included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Superannuation 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
Last updated: 29 October 2019Telephone 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
Last updated: 29 October 2019Termination 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
Last updated: 29 October 2019Third party remuneration (e.g. school fees)
Included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Tips and gratuities
Included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Tool allowance
Not included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Travel allowance
Not included
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Travel 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
Last updated: 29 October 2019Trust distributions
Included:
- Directors of corporate trustee.
- Employed beneficiary (where distribution is for work performed).
U
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Uniform (where provision of free clothing is subject to FBT)
Included
W
Guideline on the definition of wages A - Z
Last updated: 29 October 2019Workers compensation payments and reimbursements
Not included
Last updated: 29 October 2019