Calculating your Experience Rating
There are a few steps to calculating and applying your Experience Rating to your Work levy. Here's how it works.
The Experience Period
We work out the impact Experience Rating has on your Work levy by looking at your recent workplace claims history.
The Experience Period excludes the most recent year of claims because this may not be finalised. Instead, it covers the three years prior to that. For example, your 2023/2024 invoice will account for claims in the 2019/2020, 2020/21, 2021/22 years and exclude 2022/2023.
| Experience period | ||||
|---|---|---|---|---|
| Year 3 | Year 2 | Year 1 | Year 0 | Levy invoice year |
How we calculate Experience Rating
To calculate a business' Experience Rating, we take three pieces of information from claims which occurred in your workplace:
- the number of weekly compensation days for your employees
- the number of claims for your employees with medical and treatment costs over $500
- fatal claims.
Claims information
We compare claims and recovery at work performance with businesses in your industry using two rates. If you’re in a business group, your group members' claims information will be compared against the industries they operate in.
Risk management rate
This is the number of claims with medical and treatment costs greater than $500 per $1 million liable earnings in your industry. Two rates are calculated that show:
- your business' or business group's claims record
- the number of claims in your industry.
Rehabilitation rate
The number of weekly compensation days for qualifying claims per $1 million liable earnings in your industry. We calculate two rates:
- one for your business or business group
- one for your industry.
Your performance against the risk management and rehabilitation rates determines your Experience Rating calculation and whether you’re likely to receive a discount or loading. A greater weighting is given to your most recent completed year’s performance, and less to earlier claims.
Fatal claims
From 1 April 2023, we'll be including a specific loading for personal injury resulting in death in the two most recent years of the Experience Period.
We'll add a:
- 20% loading for a fatal claim in the most recent year of the Experience Period
- 10% loading for a fatal claim in the year prior to that
- maximum 20% loading if there are fatal claims in each of the two most recent Experience Period years
- In the third year of the Experience Period, a fatal claim is treated as a claim with medical costs over $500.
There is a cap of 100% loading for Experience Rating customers, so in some cases the relevant uplift may not be included in full, for example, if it puts the employer over the 100% cap.
If there are no fatal claims, this step is skipped and the Experience Rating band calculation continues as normal.
Experience Rating bands
To work out the amount of your final discount or loading we place your Experience Rating calculation into an Experience Rating band, using the table below.
| Experience Rating bands | Final discount or loading | |
|---|---|---|
| Discount | < = -45 | -50% |
| < -45 to -35 | -40% | |
| < -35 to -25 | -30% | |
| < -25 to -15 | -20% | |
| < -15 to -5 | -10% | |
| Neutral | < -5 to 5 | 0% |
| Loading | > 5 to 15 | +10% |
| > 15 to 25 | +20% | |
| > 25 to 35 | +30% | |
| > 35 to 45 | +40% | |
| > 45 to 55 | +50% | |
| > 55 to 65 | +60% | |
| > 65 to 75 | +70% | |
| > 75 to 85 | +80% | |
| > 85 to 95 | +90% | |
| > 95 | +100% |
For business groups, if there are multiple business activities this calculation is done separately for each industry it operates in.
To calculate the group’s final Experience Rating adjustment, we weight these rates based on the group’s size in the industry, which is determined by the liable earnings filed. We bring them together to calculate the group’s final adjustment.