Your Australian policy almost certainly does not reach a person working full time in Manila. Workers compensation for an overseas employee is decided by a state of connection test, and someone who usually works outside Australia does not establish one. The cover you pay for is attached to a jurisdiction, not to a name on your payroll.
Nothing prompts a founder to check. The premium arrives as one line on an annual policy, calculated on Australian wages, and a salary paid from a different account never enters it. The absence reads as a saving. It is a gap, and closing it is unglamorous: employ the person properly where they live, which is the job of an employer of record.
Workers compensation follows a state, not a staff member
The State Insurance Regulatory Authority's cross border guide, dated 1 May 2026, sets out the test. Tests A to C run in order: where the worker usually works, where the worker is usually based, then where the employer's principal place of business in Australia sits. Tests D and E apply only if none of the first three establishes a connection, and Test E is switched off where a worker can claim compensation for the same injury under a law outside Australia.
Read that last clause twice. It assumes a foreign scheme exists to claim under.
WorkCover Queensland says it plainer. A worker's principal place of employment decides whether they must be insured in Queensland, and the guidance is explicit: "You do not need to consider temporary arrangements of six months or less." Six months is the hinge. A secondment is temporary. A hire is not.
Does a contractor agreement change the answer?
It changes who you can blame, not who is covered. Classification runs on the same facts that decide Fair Work obligations for offshore staff and the ATO treatment of offshore contractors: who sets the hours, whose systems, whether the work can be delegated. Calling someone a contractor enrols them in no injury scheme anywhere.
What workers compensation costs on each side of the water
The Victorian Parliamentary Budget Office compared the schemes in July 2023 and put the average premium rate for 2023-24 at 1.6 per cent of wages in New South Wales, 1.8 per cent in Victoria, 1.85 per cent in South Australia and 1.29 per cent in Queensland. On a $95,000 AUD salary the New South Wales rate is $1,520 a year. That is what an employer pays so an injury has somewhere to go.
The Philippine Social Security System runs the Employees' Compensation Program, and the employer pays the contribution in full: ₱10 a month where monthly compensation sits under ₱14,750, and ₱30 at ₱14,750 and above. Thirty pesos. For ₱360 a year the scheme carries disability income benefits, medical services, rehabilitation, a ₱1,000 monthly carer's allowance and a ₱30,000 funeral benefit.
Protection is not the expensive part. It is the conditional part. That contribution exists only where the person is registered as an employee with SSS, and someone paid by direct transfer from a Sydney account is registered with nobody. Set ₱360 a year against Outstaffer's published price of $250 per employee per month and the arithmetic stops being about money. Registration was never what you were saving on.
What happens when no scheme responds?
The cost arrives undiluted. No insurer funds income replacement, no rehabilitation pathway exists, and nothing caps a negotiated outcome. Get advice on your own arrangement before you need it.
The counter-argument worth taking seriously
Most offshore roles are desk roles. A bookkeeper in Cebu and a developer in Da Nang face a low base rate of serious injury, thousands of these arrangements run for years without incident, and insuring against the rare event is a poor use of a small company's money.
That argument is about frequency. The exposure is about severity.
Related reading
- The five-question test for whether your offshore contractors are actually employees
- Superannuation for an offshore employee in the Philippines
Here is where I land. Workers compensation for an overseas employee is a question with one acceptable answer: the name of the scheme that would respond, and the date the person was enrolled in it. If you cannot give both, you are self-insuring and have not priced it. Our compliance position starts there, not at the contract.
So: for your people working outside Australia right now, which scheme holds the risk, and who last checked?
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