Freeze on NSW Workers Compensation premium rates: The impact on your cashflow
Workers compensation premium rates have been frozen.
Under the Workers Compensation Legislation Amendment (Reform and Modernisation) Act 2026, a temporary freeze on workers compensation premium rates in NSW has been introduced. Premium rates, at scheme level, will be held at 2025–26 levels for the 2026–27 and 2027–28 policy years.
What is workers compensation? And what does this freeze mean for your contributions and wider cashflow?
What is the workers compensation scheme?
Workers compensation in New South Wales (NSW) is a compulsory, statutory insurance scheme designed to protect workers who suffer a work-related injury or illness.
The scheme is governed primarily by the Workers Compensation Act 1987 (NSW) and is regulated by the NSW State Insurance Regulatory Authority (SIRA).
How will the freeze to premium rates affect your cashflow?
The freeze on workers compensation premium rates for the 2026–27 and 2027–28 financial years means your business can look forward to more stable and predictable premiums.
It’s worth noting, however, that individual premiums would still need to be recalculated if wages, business activity, claims history or incentive eligibility changed during the freeze.
Three ways the freeze may affect your employment costs
Protection from systemic hikes: Capping base rates of workers’ compensation prevents sudden, unexpected rate increases. This removes the worry of unplanned spikes in premiums and keeps your recurring installment amounts predictable – as long as your overall payroll remains constant.
Stable employment overheads: Freezing the baseline rate locks a major variable component of your total employment costs. This makes it easier to budget accurately for future hiring and wage planning.
More cash in the bank: Preventing artificial premium spikes leaves cash in the bank that may have been spent on higher insurer payouts. This bumps up your level of working capital, helping you cover your daily operational expenses and outgoings.
Helping you manage your employment costs
Want to know the real-world impact of changing employment costs on your working capital?
Come and talk to our team. We can help you model and forecast your ongoing employment costs and the potential impact on your cashflow and working capital.