Workers' comp is compulsory the moment you employ someone — but as a sole trader it generally will not cover you for your own injuries. Here is who must hold it, the threshold, and what a solo operator does instead.
State schemes — who must insure
Workers' comp is state-based, and you must insure your workers (employees, and many contractors and apprentices) once you employ:
| State | Scheme |
|---|---|
| NSW | icare (regulated by SIRA) |
| VIC | WorkSafe Victoria |
| QLD | WorkCover Queensland |
| WA | WorkCover WA (via approved insurers) |
| SA | ReturnToWorkSA |
| TAS | WorkSafe Tasmania |
The threshold: in NSW and VIC you must hold cover once you pay over about $7,500 in annual wages — or you have any apprentices or trainees (no floor). QLD, WA and SA require cover as soon as you have workers, regardless of wages. A "worker" includes employees and some "deemed workers" (certain subbies), and a working director paid through payroll is usually a worker too.
The sole-trader trap — you cannot cover yourself
This is the catch (the same one in WHS for the Sole Trader): a sole trader generally cannot take a workers' comp policy on themselves — in law you are the business, not its employee. So you cannot claim standard workers' comp for your own injury. Your options:
- Deemed worker: if you work regularly for a builder under employee-like conditions (you cannot delegate, they control your hours and method), you may be a deemed worker covered by their policy — despite invoicing as a contractor.
- Company + working director: set up a company and pay yourself wages → you are a working director, covered under the company's policy once the thresholds are met.
- Private cover: otherwise you arrange your own personal accident and illness insurance and income protection (see Tools & Income Protection Insurance). PL does not cover your own injury — it is third-party only.
The claim process
The common steps: the worker tells you as soon as possible and sees a doctor for a work-capacity certificate; you notify the insurer (in NSW within about 48 hours, or an excess may apply) and record it in the injury register; the worker lodges a claim; the insurer decides liability within set timeframes and starts weekly payments plus medical and rehab if accepted; and you support a graduated return to work.
Common mistakes
- Thinking you are covered as a sole trader — you are not.
- Not insuring an apprentice — there is no wage floor for them.
- Late notification to the insurer.
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