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.
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.
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:
You’ll receive a provisional invoice with an estimated levy and a year-end adjustment.
How much your business pays depends on:
You can work out how much your levy is likely to be using ACC's levy calculators.
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 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.
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.
You’ll be invoiced for ACC levies once a year. You’ll pay for:
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.
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.
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.
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.
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.
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.
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.
You can pay:
Avoid these common levy pitfalls: