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This article will demonstrate how to pay your employees while they are under a workers compensation (or WorkCover) arrangement. By setting up a dedicated pay category for workers compensation payments, you can easily manage these special circumstances while ensuring compliance with relevant regulations.
Daily activities
Create a new pay category for Workers Compensation
The first step is to create a dedicated pay category that can be used for any employee receiving workers compensation payments. See how to do this in this article.
Tip
You'll be able to use this pay category for any employee in a similar situation in the future, making it a reusable solution for workers compensation arrangements.
Set up the affected employee
Once you have created the Workers Compensation pay category, you need to configure the affected employee's pay settings.
- Click Employee > List > Click the employee >Click an affected employee's employee.
- Navigate to the Pay Rates page.
- Untick the "Show in pay run" box next to their default/usual pay category.
- Scroll down the page until you see the new Workers Compensation pay category.
- Enter the hourly rate and number of hours you'll be paying against this pay category each week.
- Tick the box to "Show in pay run" for the Workers Compensation pay category.
- Scroll down and click Save.
From this point forward, this employee will show up in each pay run with an earnings line using the Workers Compensation pay category.
Reverting settings when Workers Compensation period ends
When the Workers Compensation period is over, you'll need to revert the employee's pay settings back to their normal configuration.
- Go back to the employee's record.
- Navigate to the Pay Rates page.
- Untick the "Show in pay run" box next to the Workers Compensation pay category.
- Tick the "Show in pay run" box next to the employee's default/usual pay category.
- Scroll down and click Save.
The employee will now return to their normal pay configuration for future pay runs.
Key things to note
Superannuation Guarantee (SG) Status
The SG status of workers compensation payment earnings is determined by whether your employee has returned to work or not. For detailed information about Ordinary Time Earnings (OTE) and superannuation obligations during workers compensation periods, please refer to the ATO OTE checklist.
Important
Always consult the current ATO guidelines or seek professional advice to ensure compliance with superannuation obligations during workers compensation arrangements.