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Workers' Compensation · RTW Cost Analysis

What does an injury really cost
your payroll?

The claim lodgement is just the visible tip. The real cost sits in the pay run — lost productive capacity, modified-duty inefficiency, replacement labour premium, overtime loading, and internal coordination time. This tool quantifies it.

For payroll & finance teams RTW coordinators HR & safety managers Per-claim analysis
Up to 80% reduction in productivity
drain with WHA programs
Up to 14:1 return on investment
delivered by WHA
Faster RTW evidence-based clinical
programs, AHPRA-registered
👤
Worker & Pay Run
Base parameters for the affected worker
$
hrs
🏥
Absence
Hours the worker was completely absent this pay run
hrs
Lost capacity cost = absent hours × ordinary rate
🔧
Modified Duties
Hours worked at reduced capacity during this pay run
hrs
%

Lost productivity = modified hours × (1 − productivity%) × ordinary rate. The productive portion is not counted as a drain.

🔄
Replacement Labour
Only the premium above the injured worker's rate counts
hrs
$

If replacement labour is cheaper than the injured worker's rate the premium is negative (a saving).

⏱
Overtime
Only the loading above ordinary time counts as a drain
hrs
$

OT premium = overtime hours × worker rate × (multiplier − 1). E.g. 8 hrs at $38 at 1.5× = 8 × $38 × 0.5 = $152.

📋
Internal Coordination
Admin, supervisor, HR, RTW & safety time
Role Hrs $/hr
Payroll Admin
h
$
Supervisor
h
$
HR / RTW / Safety
h
$

Total Productivity Drain This Pay Run

$0

Normal pay-run labour value: $0

Annualised run-rate $0/yr

Cost Breakdown

Lost Capacity (Absence)
0 hrs × $0/hr
$0
—
Lost Modified-Duty Productivity
0 hrs × 40% × $0/hr
$0
—
Replacement Labour Premium
0 hrs × ($0 − $0)
$0
—
Overtime Premium
0 hrs × $0 × 0.5
$0
—
Internal Coordination Cost
Admin + Supervisor + HR/RTW
$0
—
With Work Healthy Australia Up to 80% reduction
Pay-run savings (80% recovery) $0
Annual run-rate savings $0/yr
Residual drain (retained 20%) $0
14:1 Maximum ROI
delivered by WHA
0% Drain as % of normal
pay-run labour cost

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How each cost component is calculated

The calculator isolates the economic cost that sits around a claim — not the claim itself — using six distinct cost drivers.

Lost Capacity (Absence)

The full productive value of time the worker was completely absent — even if covered by workers' comp, this capacity was gone from your operation.

absent_hrs × ordinary_rate

Modified-Duty Productivity Loss

Only the lost portion counts. A worker on 60% productivity delivers 40% lost value on modified duties. The 60% productive portion is not a drain.

mod_hrs × (1 − prod%) × ordinary_rate

Replacement Labour Premium

Only the difference between replacement cost and the injured worker's ordinary rate. If replacement is cheaper, this shows as a negative (saving).

rep_hrs × (rep_rate − ordinary_rate)

Overtime Premium

Only the loading above ordinary time. 20 hours at $45 at 1.5× carries a $450 premium — the ordinary-time portion is normal labour cost, not a drain.

ot_hrs × ot_rate × (multiplier − 1)

Internal Coordination

Payroll admin processing the claim, supervisors adjusting duties, and HR/RTW/safety staff managing the case. Often invisible but consistently significant.

Σ (role_hrs × role_rate)

Annualised Run-Rate

Not a prediction — a run-rate indicator. It scales the current pay-run drain by the number of pay periods per year. Useful for budgeting and business case modelling.

pay_run_drain × pay_runs_per_year
Important: This calculator estimates the indirect productivity costs surrounding a workers' compensation claim. It does not calculate statutory compensation entitlements, insurance premiums, or legal costs. Replacement labour premium can be negative where replacement workers are paid less than the injured worker. Results are indicative only and depend on values entered. WHA savings and ROI figures are based on published program outcomes across the WHA client portfolio; actual results depend on industry, claim complexity, workforce size, and program design. Always verify calculations with your payroll system and financial advisors.