Premium calculation for experience-rated employers

You're considered an experience-rated employer if your average performance premium is over $30,000. This means your premium will be impacted by your claims performance.

Premium formula

The formula below shows you how your premium is calculated. Please refer to the table below for definitions of each component.




Average Performance Premium

Claims Performance Adjustment


Dust diseases contribution


Mine Safety Fund Premium adjustment


Safe Employer Reward


Performance discount


Apprentice incentive discount


Premiums adjustment contribution


Catastrophic claim contribution

Where a Catastrophic claim contribution is applied, it is shown as a separate charge and included in the total premium payable.

View formula definition

Note: Cap on premium rate changes

There is a 30 per cent cap on premium rate changes for experience-rated employers. The premium rate is calculated by dividing the employer's premium payable (APP x CPA) by Wages and compared to the premium rate for the last policy period.

The cap is only applied if the increase or decrease results from your own claims experience, or due to amendments in the premium methodology. It does not apply if the premium increase or decrease is only due to a change in your Workers Compensation Industry Classification (WIC), business activity or wages. If you qualify for capping this is automatically applied to your premium.

What is premium capping and how does it work?

Calculation example

Two bakers work in a kitchen together. Based on these figures, if Hotloaf Pty Ltd had premium impacting claims costs of $20,000 their CPA rate would be 1.126 resulting in a premium payable before adjustments of $101,340 and the Safe Employer Reward would not apply. Employers whose claims performance is worse than the Scheme will pay a premium higher than their average performance premium.

Hotloaf Pty Ltd is a bread manufacturing company.

WIC rate 4.500%
Wages $2,000,000
Average Performance Premium (APP)$90,000
Claims Experience $0
Claims Performance Adjustment (CPA) rate 0.925
Claims Performance Adjustment amount - $6,750
Premium before adjustments (APP x CPA) $83,250

As the employer has no claims history in the last three policy periods, the Safe Employer Reward will reduce the premium by $6,750.

As the employer's claims performance is better than the Workers Compensation Insurance Scheme's performance, the employer will pay less than the average performance premium.

Premium formula definitions

Acronym Term Description Details
P Premium Total premium payable including adjustments.

Premium is calculated twice annually:

  • at renewal (based on estimate of wages)
  • at adjustment (based on actual wages)
APP Average Performance Premium (previously known as Basic Tariff Premium BTP)
  • wages x WIC Rate (%)


  • number of plates, rides, bouts, drives x WIC rate ($) - for per capita WICs
 CCC Catastrophic Claim Contribution
  •  APP x contribution % rate
  • applied when work related incident (or its complications) involves a fatality
  • applied only once per incident, regardless of number of fatalities
  • applied at end of policy year in which incident occurred
  • the CCC is shown as a separate charge in the calculation and is included in the total premium payable.
CPA Claims Performance Adjustment

The CPA rate for the employer is:

  • a decimal number (in the CPA table) at the intersection of an employer's claim performance rate (CPR) AND the employer size or group size (APP or GAPP)

How is CPA calculated?

CPA rates contained in the CPA table are determined by icare's actuaries.

  • CPA is used to adjust (discount or load) an employer's APP based on their claims performance compared to the Workers Insurance Scheme performance

Adaptive Maximum CPA

  • An employer who has a maximum CPA cap for more than one consecutive year will have an increased CPA rate.
  • Adaptive Maximum CPA applies to policy renewal years:
    • 2019/20
    • 2020/21
    • 2021/22
    • 2022/23
CPM Claims Performance Measure

The CPM for an experience-rated employer is:

  • a percentage rate derived by dividing an Employer's individual Claims Costs for the last three consecutive periods of 12 months by the employers total APP for the same three-year period
  • Note: If a prior period is less than 12 months, the APP for the short-term period is annualised.

CPM informs the CPA component and does not appear in the main premium formula.

CPM determines an employer's individual claims performance.

It is compared to the Scheme's performance to determine if a loading or discount should be applied to the premium.

CPR Claims Performance Rate A percentage rate derived by dividing an employer's CPM by SPM. 

CPR informs the CPA component and does not appear in the main premium formula.

The CPR and the employer size (or group size, if grouped) will determine the employer's claims performance adjustment rate (CPA).

  • If the employer's CPM is lower than the SPM, the premium will be reduced.
  • If the employer's CPM is higher than the SPM the premium will increase.
SPM Scheme Performance Measure A percentage rate determined by icare's actuaries and used to benchmark an employer's individual claims performance (CPM).

SPM informs the CPA component and does not appear in the main premium formula.

How is SPM calculated?

  • SPM is the percentage rate derived by dividing the Schemes Claims Costs for three previous premium years (36 months) by the Schemes total APP for the same three-year period.
  • See current SPM rates
ESI Employer Safety Incentive
  • APP x ESI%
  • Discount off premium payable (before adjustments)

Employers get to keep this incentive regardless of claims.

  • This is a contribution to assist employers to implement Workplace Health and Safety.

Available for the following policy renewal years:

  • 2015/16
  • 2016/17
  • 2017/18
  • 2018/19
  • 2019/20
  • 2020/21
  • 2021/22
  • 2022/23
SER Safe Employer Reward


A performance based reward applied at policy renewal on the basis of:

  • 3 years of policy history; and
  • no catastrophic claim charge in last 3 years; and
  • a CPR less than 100%
RTWI (Experience-rated employers) Return to Work Incentive

A percentage discount applied directly to individual claim costs where an injured worker is returned to work (from Date of Injury) between:

  • 0<13 weeks – 15% discount
  • 13<26 weeks – 10% discount
  • 26<52 weeks – 5% discount

The RTWI does not appear in the main premium formula.

  • An incentive to encourage early return to work of injured workers.
PD Performance Discount A percentage discount applied to (APP - Apprentice APP)
  • Applied at hindsight adjustment
  • Based on employer's claims performance
  • May not be applied every policy year - depends on Scheme financial performance
Q Premiums Adjustment Contribution Additional levy (available if required by icare)

Set to '0'

  • Not applied to date
D Dust Diseases Contribution An additional amount included in total premium payable
  • Applies to all employers except those with per capita WIC Codes (for example taxis)
  • Dust Diseases Contributions are contained in the premium rates table
  • Paid by icare to Dust Diseases Authority to administer and pay for claims made under the Workers' Compensation (Dust Diseases) Act 1942
M Mine Safety Fund premium adjustment
  • Wages x MSFPA%
  • Percentage rate per annum applied to wages of Division B Mining employers (WIC Codes 120000 to 152000)
  • An additional amount included in total premium payable
  • Collected for the Mine Safety Fund
  • Paid by icare to Department of Regional NSW under Mine and Petroleum Site Safety (Cost Recovery) Act 2005
A Apprentice incentive
  • Apprentice wages x WIC Code % rate
  • Discounted from premium after premium payable is calculated
  • Eligibility - NSW employers who employ apprentices under NSW Training Services contract
  • Incentive for employers to hire apprentices and address NSW skills shortage
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