Remuneration is defined as payments made to or for the benefit of a worker; but it's not just wages or salary you need to include in your annual reconciliation statement.
Benefits to workers include items such as superannuation contributions, fees or bonuses, footwear, uniform, clothing and/or dry cleaning allowances and living away from home allowances. Then there's accommodation, motor vehicle and travel allowances, annual leave loading and holiday pay, back pay, call out or call back allowances and dirt money.
There are more than 60 allowances or benefits that could make up the remuneration you pay your workers. Some areas that WorkCover has identified that employers sometimes overlook include:
- understating superannuation and gross wages
- not including payments to subcontractors who are deemed workers under the Act
- remuneration that is not verified against original records.
For more information download these documents:
Example: Remuneration for a consultancy firm
Environmental Consultancy is a small firm of about 10 workers that consults to heavy industry on its impact on the water table throughout South Australia.
The consultants are required to travel to regional SA for up to a week at a time to undertake work with various heavy industry businesses. At the end of each financial year Environmental Consultancy is required, along with all other employers in SA, to complete a WorkCover reconciliation statement and declare the remuneration of its workers.
Due to the type of work undertaken, Environmental Consultancy does not just simply pay its workers wages and superannuation. The consultants are all paid $65,000 per year (including superannuation) plus allowances for meals, accommodation, clothing/uniform and dirt money.
To determine which of these allowances is to be included in the declared remuneration on Environmental Consultancy's reconciliation statement a representative contacted WorkCover's Service Centre on 13 18 55.
After discussing each of these items it was identified that all payments for the following allowances must be included in their declared remuneration meal allowance, clothing/uniform allowance and dirt money.
The only allowance not included in remuneration was the accommodation allowance. Environmental Consultancy only pays its workers the rate of $127.60 per day, in line with the amount calculated under the State Payroll Tax Act. The WorkCover Service Centre advised the Environmental Consultancy representative that only amounts that exceed this amount are included in WorkCover's definition of remuneration.
Fines for underdeclaring
Underdeclaring remuneration is an offence, a fine or penalty may be applied.
A full list of payments and related benefits that WorkCover SA includes in its definition of remuneration - and the treatment of GST - is available in the download document.
For more information on remuneration view the employer FAQs, contact us to make an enquiry or call the Service Centre on 13 18 55.