You’ve often seen that most companies are entitled to paying large sums of WSIB Premium Remittance Forms. Why do companies pay for such probable workplace injuries that have very little chance of occurring?
This is mainly to protect themselves from large payments if a worker inflicts workplace injury. The Workplace Safety & Insurance Board is primarily funded by the premiums that they receive from Ontario businesses. These premiums are kept in reserve, and all the costs of workplace injury of a worker will be covered up by the WSIB to replace the lost wages and payment of healthcare costs.
But, there is a lot to know about WSIB Premium Remittance and how it can help you and your country’s businesses. Here’s how.
Before You Get Started
Under the WSIB Premium Remittance, you must know the total gross earnings for each employee who’re working during the reporting period. This is important because the gross earning will indicate how much premium remittance you’ve got to pay to the Workplace Safety & Insurance Board (WSIB) board.
The preprinted dates on your premium remittance forms mark the beginning and end days of the reporting period. This is very important because it reflects the premium remittance frequency. Simply put, the reporting time period is the time between which premiums must be reported, and the payments must be made to the WSIB.
Moreover, you must know how the WSIB defines a worker for the purpose of reporting and paying insurance premiums. This means that workers in your company are entitled to a different premium remittance compared to contractors and other stakeholders.
There can be four types of insurance that are catered to different stakeholders. These are:
- Workers
- Contractors
- High Paid Employees
- Optional Insurance
So, how do WSIB define these? Let’s have a look!
Workers
A worker is a person who has been in a contract for offering service in exchange for income or apprenticeship. To be legally defined as a worker, one must offer their service and have an influence on the business. A member of the family or relative of the business’s owner can also be regarded as a worker if he/she is offering their services and appear on the employer’s payroll.
For a worker’s insurance, both full-time and part-time workers are covered in the workplace injury insurance.
Contractors
A contractor is defined as any individual or company that performs work for another company or individual in exchange for payments. If the contractor is an individual and has no employees working under him, he might be considered as either being a worker or an independent operator. This will be confirmed by the WSIB.
High Paid Employees
The WSIB has set an annual maximum insurable earnings of $64,600 which a worker can be entitled to. Whenever the employee reaches this max cap, you must stop paying the premium remittance and report the premiums for that worker for the rest of the year. You can, too, report to the WSIB just in case.
Optional Insurance
Apart from workers, the people who aren’t entitled to workplace injury benefits by default can choose to have an optional insurance. This includes people ranging from sole owners, partners, independent operators, freelancers, and executive officers. To be able to claim workplace injury benefits, they must apply for optional insurance coverage. Once they’re covered by the insurance, the individual can be considered to be eligible for the benefits.
To apply, however, the individual must report the gross insurable earning calculation to the WSIB, and the insurance can’t go beyond the max cap of $64,600 annually.
How To Calculate Your Workplace Injury Insurance Payment
Up until now, we’ve seen how WSIB classifies a worker, contractor, and people opting for optional insurance. Now, how can you calculate how much you’ll be receiving from your workplace injury insurance payment in case you’re injured? Here’s how!
Before Calculating
To calculate the WSIB Premium Remittance and Insurance that you’re entitled to, you must at first determine the number of workers that you’re reporting earnings for this reporting period. This will help the WSIB in deciding the amount of payments that the workers will receive.
Moreover, you should state the gross insurable earnings for each and every worker who’s there during the reporting period. The gross earnings will be calculated after the deductions on T4s for income tax, benefit plans, etc. This will exclude any item such as supplementary maternity benefits.
Next, for any Classification Unit (CU) who has zero earning in the reporting period, you must record zero in the WSIB forms. This will ensure that you’re cleared of any additional payments.
The Calculation
To calculate the WSIB Premium Remittance, you must at first add up the gross insurable earnings for all the workers under your organization for the certain reporting period. This amount should be filled in column A. Next, multiply the number you’ve got in column A by the WSIB rate specified in column B.
To get the amount of premium you have to pay, divide the number you’ve got previously by 100. You must write this down in column C.
What If You Have Multiple CUs in Your Company?
If you have multiple CUs in your company, all work performed will be considered as being direct or common.
What’s direct work?
Simply, direct work is the work done by the CUs. On the other hand, common work is the work done to support direct work, or business activities. These may include human resources, office staff, accounting, and others.
In most cases, the common work must be shared equally among the CUs when you’re calculating the premiums. To do this, you must:
- Determine the CU’s payroll in terms of percentage of the firm’s payroll
- List out all the common earnings
- Allocate the common earnings based on each CU’s part in the payroll
Conclusion
Let’s be straightforward – understanding the WSIB Premium Remittance can be very tough. There are a lot of things to consider; we’ve tried to include everything that you need to know about the WSIB Premium Remittance so that it gets easier for you to calculate remittance payments.
Remittance Insurance helps to protect you and your employees from incurring large losses in case of workplace injury. In such cases, workers can apply for workers’ compensation. Knowing more about the WSIB Premium Remittance will help you know exactly how much to pay in order to keep up with the workplace injury insurance.
We hope that you’ve learned everything that you needed to know about the WSIB Premium Remittance Forms and how you can calculate the payments.
