Is Workers' Compensation Taxable?

We are frequently asked if workers compensation claims (including WorkCover payments) are taxable. The answer depends on whether it is a weekly income payment or a lump sum settlement.

Weekly Income Payments

Yes. The weekly WorkCover payments which an injured worker receives while unable to work, are treated like salary and are therefore taxable.

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Lump Sum Payments 

No, they a tax-free. Lump sum payments made by Workcover for permanent impairment (the degree to which you are assessed as being physically impaired as a result of the injury) and damages you are awarded from a common law claim are not taxable.

 

Last update on:
May 29, 2018
Disclaimer: This information is designed for general information in relation to Queensland compensation law. It does not constitute legal advice. We strongly recommend you seek legal advice in regards to your specific situation. For expert advice call 1800 266 801 or chat via live chat to arrange free initial advice with our Principal lawyer, Greg Smith.

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