Work Injury Compensation Act: Salary Threshold Change

Author: Jonathan Bywater

    1 minute read    

The Working Injury Compensation Act 2019 or WICA was introduced by the Government to provide a more straightforward way for employees to claim compensation for work-related injuries. 

Under the Act, unless exempt, employers are required to take out insurance with a Government approved designated insurer. This insurance needs to cover things such as medical expenses, permanent incapacity and death due to work-related injuries. 

The minimum and maximum compensation limits as of 1 January 2020 are as follows:

Insurance type Minimum threshold Maximum threshold
Medical expenses N/A $45 000 (accrued within the year following the date of accident)
Total permanent incapacity $97 000 $289 000
Death $76 000 $225 000

Employee medical leave wages and light duties due to work-related injuries are calculated as a percentage of an employee’s average monthly earnings, with the percentage applied being dependent on the amount of time since the accident occurred. More information on this can be found here.

Non-Manual Worker Exclusion

Employees that are not employed to carry out manual labour can be excluded from WICA if their salary is over a certain threshold. From April 2021 the salary threshold for exclusion is being increased from $2 100 to $2 600 per month

Salary is defined by the Employment Act, relating to the remuneration of your employee. This excludes things such as overtime pay, bonuses, annual wage supplements, productivity incentives and allowances.

We would recommend that you check if you have employees previously excluded from WICA who you now need to take out insurance for.

We hope the above has proved useful to you. If you have any questions on how this relates to SimplePay, you can contact our team at [email protected]

Equally, if you are not yet a client of SimplePay but would like to be, or if you’d like to know how we can take the effort out of filing and calculating payroll, get in contact with us or visit our website:

Keep well and stay safe.

Team SimplePay