How to calculate premium percentage

Calculating your premium involves four steps:

In most cases, a law practice’s gross fee income (GFI) for the last full financial year is used to calculate its base premium for the following year (other than for newly established law practices). Your base premium reflects the overall claims experience for law practices within your GFI range, as determined by Lawcover’s statistics.

Your base premium is then adjusted up or down depending on your law practice’s (including any prior practices) claims history.

Your base premium may be adjusted down depending on your law practice’s principals’ satisfactory attendance at Lawcover’s Risk Management Education Program (RMEP) or your law practice’s ISO 9001 – Quality Management Systems risk management certification.

Most law practices will have the option to select a higher excess instead of the standard excess, in return for a premium reduction.

The current premium discounts for participation in Lawcover’s Risk Management Education Program (RMEP) are set out in the table below.

For full details of the new RMEP program and discounts please click here.

Our premium system for registered employers:

• features a simple premium calculation formula that is easy to understand
• applies a discount upfront to the base premium of all employers
• only includes income support costs for claims for the previous year relating to injuries within the previous three years, allowing employers to influence the amount of premium they pay by focusing on return to work
• rewards any employer with a positive claims cost performance.

The average premium rate for 2022-23 is 1.80%.

How we calculate your insurance premium

Your insurance premium is calculated based on:

• the annual remuneration you pay your workers, including wages, super and other allowances
• your industry premium rate, and
• any income support costs paid to your worker/s with time lost claims in the previous year.

The premium for newly registered employers is calculated based on the estimated remuneration you provide as part of your registration.

Thereafter, your premium is calculated at the start of each financial year, using the information you provide in your employer remuneration return.

When you complete your employer remuneration return you can choose to have your premium calculated using the actual remuneration paid or payable to workers from the previous financial year, or the estimated remuneration that will be payable to workers for the year ahead.

If you believe that a decision we have made in relation to your premium calculation is unreasonable, please call us on 13 18 55 between 8:30am and 5:30pm Monday to Friday or email to discuss your concerns.

For more detailed information on how your premium is calculated, including examples, read Your premium explained.

Minimum premium

While all registered employers are required to pay an annual insurance premium, many sole operators and small businesses will only have to pay a minimum premium for 2022-23 of $200, subject to any rounding (plus GST and WHS fee).

Reducing the amount of insurance premium you pay

You can directly influence the amount of insurance premium you pay. This can be achieved by preventing injuries from happening, and if they do, assisting the injured worker to recover and return to work as quickly as possible. This helps to minimise the income support costs for a work injury claim, and therefore the premium you pay.

For free tailored advice on improving your return to work practices, contact our return to work coordinator support service on 13 18 55 or email .

The Percentage Increase Calculator finds the increase from one value to another in terms of a percentage.

Enter starting value and final value to find percentage increase.

How to Calculate Percentage Increase

• Subtract final value minus starting value
• Divide that amount by the absolute value of the starting value
• Multiply by 100 to get percent increase
• If the percentage is negative, it means there was a decrease and not an increase.

Percentage Increase Formula

You can use the percentage increase formula for any percent increase calculation:

\( \text{Percentage Increase} = \\ \dfrac{\text{Final Value} - \text{Starting Value}}{\left|\text{Starting Value}\right|} \times 100 \)

Example Problem: Percentage Increase

Last year your favorite jeans cost $36 per pair. This year they cost $45 per pair. What is the percentage increase in the price of these jeans from last year to this year?

Percentage Increase = [ (Final Value - Starting Value) / |Starting Value| ] × 100

45 - 36 = 9 9 / 36 = 0.25

0.25 × 100 = 25%

Your workers insurance premium is based on your industry, how much you pay in annual wages, and a range of other factors.

Every business faces different types of risk, which is why we apply a premium rate based on the industry you work in.

All premiums are calculated by taking your industry classification rate and multiplying it with how much your business pays in wages. This is called average performance premium.

If that number is $30,000 or less, you’re considered a small employer and your premium remains unaffected by claims costs if a worker is injured.

If your average performance premium is over $30,000, you’re considered a medium to large employer and your premiums are experience-rated. This means your premium will be impacted by your claims performance.

To help keep premiums affordable, we offer a range of incentives and discounts to businesses that demonstrate a strong safety record and commitment to helping injured workers return to work.  

If you're a new customer get a quick quote or take out a policy

When you apply for a workers insurance policy, you are required to give details of your business activities. This helps us allocate a Workers Compensation Industry Classification (WIC) for your business.

If you have multiple separate and distinct business activities, the average performance premium formula (wages x WIC rate) is repeated for each applicable industry class, and the outcomes added together to produce the total average performance premium.

Declaring your wages

All businesses with standard policies must declare their wages annually to icare to ensure they are paying the correct premium.

This is done by filling out the wages declaration form.

You are required to lodge a declaration at the end of your workers insurance policy period.

Learn more about declaring your actual wages

As an experience-rated employer, your premiums may be affected as the result of a claim.

Your claims performance is calculated at the renewal date of your policy and includes your claims costs for the three years prior to commencement of the policy period.

Your claims performance rate (CPR) rewards you with a lower premium if you have a good record of managing worker safety and recovery at work.

Your CPR is calculated by comparing your claims performance with other NSW businesses.

If your claims performance is better than the Scheme average, then your premium will be lower than your average performance premium.

Your claim costs will be the same for both your initial and hindsight premium calculations. This means the hindsight premium calculation will not include the claims incurred during the policy period.

Claims costs included in experience premium

Certain claims costs are included in the premium calculation, while other claims costs do not impact premium.

Premium impacting costs include:

• Weekly compensation
• Provisional weekly compensation
• Permanent impairment
• Commutation payments
• Common law compensation

Costs that don’t impact premium include:

• Journey claims
• Recess claims
• Health provider costs
• Hospital and medical costs
• Legal and interpreter costs
• Estimates of future costs
• Death benefits (fatality claims incur a separate one-off charge)

Download cost of claims definition 2022-23 standard policies (PDF 0.6MB)

Loss prevention and recovery premiums

Loss Prevention and Recovery (LPR) for large businesses allows you to work with us to implement programs within your organisation to minimise your premiums.

If you have a LPR product and would like to discuss your premiums please reach out to your Insurance Specialist or email .