Premium updates for 2025-26

Workers compensation insurance premium rates will increase by an average of 8% for the 2025-26 financial year. This is in line with a direction from the NSW Government, capping the average rate of increase at 8% per annum for 3 consecutive years. This increase in 2025-26 is the third and final annual increase of 8% under this direction notice.

However, different industries present a different level of risk. Individual employer premiums will vary, with a final rate calculated according to their specific industry, claims history, safety performance and other factors. So, to calculate a premium that is fair for each business, icare applies a rate based on the past 5 years safety performance of the industry in which they operate. This means for 2025-26, some businesses will see an increase less than the scheme average of 8%, and some will be greater.

For more information on what rate your business will pay, visit the Workers Compensation Industry Classification (WIC) System and Premium Rates page.

The rates for 2025-26 apply to policies that start or renew on or after midnight on 30 June 2025. NSW businesses with a 30 June 2025 renewal date will start to receive their notices from 14 May 2025. These premiums for the 30 June policies need to be paid by 31 July 2025.

The premiums icare collect go directly towards helping injured workers, so to ensure our workers compensation scheme remains sustainable, premiums need to be priced accordingly.

Workers compensation claims costs have been rising for several years. For example, total claim costs of $4.4 billion in the 2022-23 financial year have increased to $5.3 billion in the 2023-24 financial year.

Premiums are increasing because of:

• an increase in psychological claim volumes
• increases in weekly benefits and medical costs
• a growing number of claims reaching higher whole person impairment (WPI) levels.

The most important thing for all employers to be aware of is that premium costs overall can only be kept down if employees are working in safe, healthy, injury free workplaces.

icare aims to reward businesses that create safer, healthier workplaces in NSW. The Safe Employer Reward (SER) is a performance-based incentive offered to employers who demonstrate a strong safety record and good claims performance. It can lead to a premium reduction at policy renewal.

In addition to the current performance criteria, from 30 June 2026 SER eligibility will be expanded to include the requirement of all employers to submit their actual wages declaration form within four months of their policy period expiring.

The first policies impacted are those renewing on or after 30 June 2026, which provides employers time to prepare, understand their obligations, and declare wages at the completion of each policy period.

Employers that meet the performance criteria but have outstanding wage declarations will not receive the SER.

Learn more about the Safe Employer Reward (SER) and how to submit wage declarations.

The risk of getting injured varies for people working in different industry sectors. To charge a fair amount to each industry, icare's premiums need to reflect that risk. Each industry is given a classification rate based upon that level of risk - a Workers Compensation Industry Classification Rate or WIC - which is based on the actual safety performance of the industry.  Every employer’s business is given a classification (WIC) based on their predominant business activity.

An employer's premium starts with a calculation multiplying their company's wages by their WIC rate. Every year, all WIC rates are revised to reflect the recent past performance of each industry.

Find out more on the Workers Compensation Industry Classification WIC System and Premium Rates page.

The minimum premium was updated last year for the first time in almost 10 years. It will be reviewed annually to ensure the amount reasonably covers icare's policy administration costs and allows for Consumer Price Index (CPI) increases over time. For the 2025-26 policy year the minimum premium will be $240.

The most important thing for all employers to be aware of is that premium costs overall can only be kept down if employees are working in safe, healthy, injury free workplaces.

icare offer a range of incentives, rewards, and other adjustments to help businesses in NSW lower the cost of their insurance premiums, including a discount for payment in full, on or before the due date.

Please see icare's How to lower your workers insurance premium page for further details. 

If an employer's annual average performance premium is $1,000 or more, they can pay their premium in monthly instalments. This helps employers manage their costs over time. icare gives a discount for annual premiums that are paid in full, on or before the due date.

Find out ways to reduce your premium.

When it's time to renew your Workers Compensation policy, you're legally required to declare the amount of wages paid within your business during the previous policy period. This means we can calculate a fair and accurate premium for you.

Depending on how much you’ve paid in wages during the previous policy period, your premium for the current policy period may be adjusted, and you may need to make an additional payment, or you could receive a refund.

Failure to declare your actual wages do may result in your estimated wages for the next renewal being increased by 30%.

Find out how to declare your wages

Actual wage declarations are an important tool for delivering greater fairness and accuracy in premium calculations. A 30% wage loading is applied to any renewal calculation where the employer has outstanding actual wage declarations for expired policy periods.

Eligibility for the Safe Employer Reward (SER) will be expanded to include the submission of an actual wages declaration form within 4 months of the policy period expiring.

This means the first policies impacted are those renewing on and after 30 June 2026, providing employers time to prepare, understand their obligations and declare wages upon the completion of each policy period.

All employers are encouraged to take the steps to submit actual wage declarations on time to support accurate premiums. Employers that meet the performance criteria but have the ‘most recently due’ actual wage declaration outstanding, will not receive the SER%.

Find out more about Declaring wages.  

Workers compensation premiums are distributed to cover wages that include weekly payments made to cover loss of earnings due to a work-related injury or illness, other claims costs like rehabilitation services, medical costs including surgeries and hospital visits, fees paid to Claims Service Providers who manage claims and levies paid to regulatory bodies.

See how premiums are distributed.

Yes. Premium capping prevents an employer's premium rate rising more than 30% above that of the previous year. 'Premium capping' only applies if the increase is caused by the employer's own claim costs or a change in the premium calculation method.

Premium capping does not apply if the increase is due to a change in the employer's wages or a change in the employer's industry that leads to a different industry classification.

For more information visit What is premium capping and how does it work?

If you are a large employer, that meets specific criteria, you may be eligible for one of icare's Loss Prevention and Recovery (LPR) products.

From 2025-26, an enhanced formula will be introduced to the LPR minimum premium. This means employers with the best health and safety performance pay lower minimum premiums to better reflect their risk.

You are considered a large employer if:

• your average performance premium exceeds $500,000 for a 12-month period of insurance (this can be pro-rated for shorter periods of insurance), or
• you are member of a group of which at least one member's average performance premium exceeds $500,000.

LPR Plus is designed to meet the needs of the largest and most sophisticated employers in the workers compensation scheme with an Average Performance Premium (APP) greater than $3 million.

If you think you qualify for either of these products, please visit our Loss Prevention and Recovery Products page.

Employers can contact icare's Underwriting team on 13 44 22, or via Live Chat.