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ACC levies

ACC levies fund injury claims from all New Zealanders. All New Zealanders pay an ACC levy.

As a small business owner you'll pay an ACC Work levy each year which provides cover for you and your people – your most important asset.

You'll also deduct the ACC Earners’ levy from employees' wages.

If you’re a contractor or self-employed, you’ll pay ACC every year, too. This covers you for work and non-work-related injuries.

What you pay for your employees

If you have employees, you’ll deduct ACC Earners’ Levies from their wages as part of their PAYE payments. This levy covers people for injuries that happen outside of work and not on the road, eg while playing sport or at home.

If your employee gets injured and isn’t able to work, you pay their first week of wages.

The amount deducted is based on how much your employees earn.

Paying levies if you work or run a business (external link) — ACC

What your business pays

All businesses pay levies to ACC to cover the cost of work-related injuries. It provides cover for you, or your staff if there’s an accidental injury at work. The levies go towards treatment and getting back to work as quickly as possible.

You'll pay for:

  • ACC workplace cover — the Work levy
  • Working Safer Levy — this is collected on behalf of the Ministry of Business, Innovation and Employment (MBIE) to support WorkSafe NZ’s activities.

You’ll receive a provisional invoice with an estimated levy and a year-end adjustment.

How it's calculated

How much your business pays depends on:

  • your business description — this is assigned an ACC classification unit
  • how much you pay your employees
  • your claims history — the number of work-related injury claims your business has made.

You can work out how much your levy is likely to be using ACC's levy calculators.

Calculating your levies (external link) — ACC

Classification units

These are used to set levy rates for different industries with different levels of risk.

ACC assigns your business a classification unit (CU) based on your Business Industry Classification (BIC) code. You choose a BIC code based on your main work activity when you register for GST or submit a tax return.

ACC’s classification units group together businesses with similar levels of risk to decide the levy rate you pay, and to share the cost of injuries fairly.

Find your BIC code (external link) — Business Industry Classification Code

Liable earnings

Liable earnings are the part of your payroll that levies are payable on. Things like holiday pay and overtime are liable earnings — but redundancy and retirement payments are not. How much your liable earnings are depends on how much you pay your employees.

Liable earnings (external link) — Inland Revenue

What you pay if you’re self-employed

When you start out as a sole trader, you’re automatically on ACC’s CoverPlus. What you pay will be based on the type of work you do and your liable earnings.

You can choose to change to CoverPlus Extra which gives you more control over how much of your income you want ACC to cover, and means you can lower the levies you pay.

Your first levy invoice will arrive after the end of your first year in business. After that, you’ll be invoiced once a year, usually in July or August.

Types of cover for self employed (external link) — ACC

Invoices

You’ll be invoiced for ACC levies once a year. You’ll pay for:

  • ACC workplace cover – the Work levy
  • non-work injury cover – the Earners’ levy
  • Working Safer levy – this is collected on behalf of MBIE to support WorkSafe NZ’s activities.

Levies for self-employed (external link) — ACC

Getting paid if you can't work

If you need time off work to recover from injury, weekly compensation can help with your loss of income. ACC will pay up to 80% of your income as weekly compensation if you’re unable to work because of an injury that’s covered by ACC. This means you'll still get paid while you recover.

What you get paid depends on the type of cover you have and what you earn. ACC calculates the compensation based on income from your last self-employed tax return.

Weekly compensation (external link) — ACC

If you're a contractor receiving schedular payments, you must still pay your own ACC.

If you're a contractor receiving schedular payments, you must still pay your own ACC.

Schedular payments are payments made to contractors who perform certain activities. These payments are required to have tax deducted but they’re different to salary or wage payments.

How to reduce your ACC Work levy

As a business, you'll automatically join the No Claims Discount or the Experience Rating Programme. The programme you'll join depends on how much your Work levy is every year, over a three year period.

ACC will work out whether you'll get a discount, a loading, or if your Work levy will stay the same.

How your claims history affects your levies (external link) — ACC

Current levy rates (external link) — ACC

Invoicing if you're an employer or shareholder-employer

You’ll usually get your first ACC levy invoice after you file your tax return with Inland Revenue. After that, you’ll be invoiced once a year, usually in July or August.

You'll get:

  • Provisional levy invoice for the current year — this is an estimate based on your previous year’s liable earnings and any wages or salaries you expect to pay in the coming year.
  • Levy adjustment for the previous year — if you paid less than you should have for the previous year, ACC will send you an invoice for the difference. If you paid more, you’ll get a credit applied to your account.

If your circumstances change, eg your main work activity changes or you stop trading, ask ACC to reassess your levy calculation. Fill in an ACC4618 form and send it to ACC as soon as possible.

You’ll need to pay your levy by the due date on the invoice — even if you’re waiting for a reassessment.

Invoicing if you're self-employed

If you’re a new to being self-employed, your invoice will be triggered when you file your first individual income tax return. This is usually in your second year of business.

After that, you’ll be invoiced yearly. These invoices will usually be calculated based on your earnings from the year before.

If your business details are wrong

ACC gets your income details from Inland Revenue. If they don’t look right on your invoice, you’ll need to get in touch with Inland Revenue to get this sorted. They’ll then send any updates to ACC.

Let ACC know if any other details on your invoice are wrong, as this could affect the levies you're paying. You can update your contact or business details online, and tell ACC if your business activity has changed or your business is no longer operating.

Update your details with ACC (external link) — ACC

You can pay:

  • online via internet banking
  • online via credit card (a service fee applies)
  • by direct debit, as a one-off payment or in instalments
  • by cash, cheque or Eftpos at any PostShop.

Pay your ACC levy (external link) — ACC

Common mistakes

Avoid these common levy pitfalls:

  • Not budgeting for your invoice. Use ACC’s levy calculators to get an estimate — it’s worth regularly setting money aside in a savings account to help cover the cost.
  • Not paying your invoice by the due date — you may face a penalty for late payment
  • Not realising you’ll get an ACC invoice because you’re a contractor who receives schedular payments. Schedular payments have tax deducted by the payer, but not ACC levies — avoid invoice surprises by checking with your employer whether you are an employee or a contractor.
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