Is workers compensation insurance compulsory in Australia?

Yes. Workers compensation insurance is compulsory for employers in every Australian state and territory. If you employ workers, you generally need cover in the state or territory where they work before or soon after their first day.

Workers compensation is compulsory for employers, but not sole traders without staff. Full-time, part-time, casual, apprentice, and trainee workers are generally included. Some contractors may also be treated as workers, depending on the state.

The Fair Work Ombudsman confirms that employers in each state or territory have to take out workers compensation insurance. The rules and registration process differ by state, but the core employer obligation is broadly the same. For a full explanation of how workers compensation works, see upcover's guide to workers compensation insurance in Australia.

At a glance

• Workers compensation insurance is compulsory for Australian employers
• Each state and territory has its own scheme, regulator, and rules
• Full-time, part-time, casual, apprentice, and trainee workers are generally included
• Some contractors may be treated as workers depending on the state
• Sole traders are usually not covered for their own injuries
• You generally need cover before or soon after hiring your first worker
• Penalties can apply if you employ workers without the required cover
• upcover arranges workers compensation insurance for eligible Australian employers

Who needs workers compensation insurance?

Employers with staff

Any business that employs workers generally needs workers compensation. This applies whether you have one casual or a hundred full-time staff. The obligation applies across all industries.

Apprentices and trainees

Apprentices and trainees are usually treated as workers from their first day. Cover should be in place before they start.

Contractors

Some contractors may be treated as workers for workers compensation purposes if they are engaged primarily for their personal labour. The rules vary by state and contract structure. WorkCover Queensland says employers need to know who is considered a worker so they can declare wages accurately. If a contractor holds their own workers compensation policy, they are generally covered under their own arrangement.

Sole traders

Sole traders are not employees of their own business. Workers compensation does not cover a sole trader's own injury or illness. Sole traders often look at personal accident and sickness insurance when they want income support after injury or illness. If you hire workers, you will generally need workers compensation for them.

When must cover start?

Registration timing depends on the state or territory. In most cases, cover needs to be arranged before a worker starts or shortly after you become an employer.

• NSW: employers must take out a policy as soon as they engage their first worker. SIRA provides guidance on how to get workers compensation insurance in NSW.
• Victoria: employers must register for WorkCover insurance within 60 days of first expecting to exceed $7,500 in wages(or immediately for apprentices/trainees regardless of wage). WorkSafe Victoria has a registration guide for employers.
• Queensland: employers must register with WorkCover Queensland before engaging workers. There is no wage threshold.
• WA: employers must arrange cover from an approved insurer before or when employment starts.
• SA: employers must register with ReturnToWorkSA when employing workers in South Australia.
• TAS: employers must take out a policy with a licensed insurer before or when workers start.
• ACT: employers must arrange cover through an approved insurer before or when workers start.
• NT: employers must hold cover with an approved insurer before or when employing workers.

If you are hiring your first employee, workers compensation should be on your setup checklist alongside PAYG, superannuation, and Fair Work obligations. If your workers operate in more than one state, check the state-of-connection rules before arranging cover.

How to find workers compensation insurance in your state

How you arrange workers compensation depends on where your workers are based. Some states run a government scheme where you register directly. Others use approved private insurers or brokers.

New South Wales

Register through icare online or by calling 13 44 22. SIRA regulates the scheme. You are assigned a scheme agent (Allianz, EML, Gallagher Bassett, GIO, or QBE) who manages your policy and claims.

Victoria

Register with WorkSafe Victoria. Choose from authorised agents. WorkSafe provides an employer guide for setting up WorkCover insurance.

Queensland

Register directly with WorkCover Queensland. This is a state monopoly scheme: all employers register with WorkCover, not a private insurer.

Western Australia

Arrange cover from approved insurers through WorkCover WA. The system is competitive, so you can compare options.

South Australia

Register with ReturnToWorkSA. Single government scheme.

Tasmania, ACT, and Northern Territory

Employers in these states and territories arrange cover through approved private insurers. A broker can help compare options. See the gov links in the timing section above for each state's registration authority.

In states and territories where employers can choose from approved insurers or use a broker, upcover may be able to help eligible employers arrange workers compensation cover. The pathway depends on the state or territory where your workers are based.

What happens if you do not have workers compensation?

Penalties vary by state, but operating without required workers compensation can become expensive. Depending on the jurisdiction, this can include fines, backdated premiums, and liability for uninsured claim costs. Not having cover can also affect your ability to win contracts, as many head contractors require proof of workers compensation.

If you employ workers and need to arrange cover, start with upcover's workers compensation insurance page.

How upcover can help

upcover arranges workers compensation insurance for eligible Australian employers with selected insurers and underwriters. Depending on your state and business, you may be able to compare cover options and arrange a policy online.

• 70,000+ businesses covered across Australia.
• 4.9/5 customer rating.
• Instant Certificate of Currency on policy confirmation, where available for the relevant policy.

For related guides, see workers compensation insurance in Australia, employers liability insurance, and tips for hiring your first employee.

upcover Pty Ltd ABN 17 628 197 437 is a Corporate Authorised Representative (CAR 1299211) of Experience Insurance Services Pty Ltd ABN 41 657 596 506, AFSL 539078.

Frequently asked questions

Is workers compensation insurance compulsory in Australia?

Yes. Employers in every Australian state and territory generally need workers compensation insurance if they employ workers. The rules and registration process differ by state.

Is workers comp compulsory?

Yes. Workers comp is compulsory for employers in Australia if they employ workers. The rules and registration process differ by state and territory.

Who needs workers compensation insurance?

Businesses with employees generally need workers compensation. Full-time, part-time, casual, apprentice, and trainee workers are included. Some contractors are treated as workers depending on state rules.

Do sole traders need workers compensation?

Sole traders do not need workers compensation for themselves. If they employ workers, those workers need to be covered. Sole traders often look at personal accident and sickness insurance for their own injury or illness cover.

Are contractors covered by workers compensation?

Some contractors may be treated as workers if they are engaged primarily for personal labour. The rules vary by state and contract structure. Check with the relevant state scheme.

Where do I get workers compensation insurance in my state?

In NSW, VIC, QLD, and SA, employers generally register through the relevant state scheme or authority. In WA, TAS, ACT, and NT, employers usually arrange cover through approved private insurers or a broker. upcover can help eligible employers arrange cover.

What happens if I operate without workers compensation?

Depending on the state, you may face fines, backdated premiums, and liability for uninsured claim costs. If a worker is injured while you are uninsured, you may need to fund the claim from your own resources.

‍

_{The information in this article is general in nature and provided for informational purposes only. It does not constitute personal insurance, legal, employment, or business advice. Workers compensation rules, registration requirements, and penalties vary by state and territory and can change. Always confirm current requirements with the relevant state or territory workers compensation authority before acting. All insurance products arranged through upcover are subject to the terms, conditions, limits and exclusions contained in the relevant policy wording and Product Disclosure Statement. Before deciding whether a particular insurance product is right for you, please read the relevant PDS and consider your personal circumstances. upcover Pty Ltd ABN 17 628 197 437 is a Corporate Authorised Representative (CAR 1299211) of Experience Insurance Services Pty Ltd ABN 41 657 596 506, AFSL 539078. upcover arranges insurance products with selected insurers and underwriters and does not compare all general insurers or insurance products available in the market.}