Understanding ACC levies: A guide for business owners

Accident Compensation Corporation (known as ACC) provides no-fault insurance cover for accidents in New Zealand. To fund this, ACC charges levies to businesses and individuals based on income and type of work.​

If you are self-employed, a shareholder-employee, or running a business, you will need to pay an ACC levy invoice each year once your income tax return is finalised with the IRD.​

For employees, workplace accidents are covered by the employer's Workplace Cover, while non-work accidents are covered via a levy that is part of PAYE deductions.​

Payment of ACC levies helps fund treatment and compensation for injuries at work (or outside of work). ​

It is a compulsory cost of working and doing business in New Zealand.​

ACC sends out invoices annually.​

The invoice you receive depends on whether you’re an employer, self-employed or a shareholder-employee. The type of invoice and ACC cover is clearly labelled in the top-right corner of the bill.​

Your ACC invoice may include some or all of these levies.​

Self-employed and shareholder-employees are typically invoiced for all three levies to cover both work and non-work related accidents. ​

Employers are invoiced for the Work Levy and Working Safer Levy to cover their employees for work-related accidents. The Earner’s levy (for non-work accidents) is part of employee PAYE deductions, so does not feature on the invoice.​

This is the standard cover type for employers and shareholder-employees. It covers employees’ rehabilitation and weekly compensation after an injury.​

This is the standard cover type for self-employed individuals or contractors. If you’ve had an accident and can’t work, you’ll be compensated up to 80% of your taxable income (based on your most recent tax return).​

This is an optional cover type for self-employed individuals or contractors. This allows you to choose how much of your income you want to be covered for if you have an accident and can’t work.​

Reach out to ACC directly to discuss this option with them if you think you require more than the standard cover.​

Please note: for this cover type, you will receive two invoices each year as the Working Safer Levy is charged separately once your income tax return is finalised with the IRD.​

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For more information on your specific invoice type, visit ACC’s website which explains each type in detail (including screenshots of a sample invoice).​

ACC levy rates vary depending on:​

Each business industry classification (BIC) is assigned a specific risk rating. For example, construction businesses pay a higher levy rate than office-based businesses because of the greater risk of injury. The Work Levy rate is determined from this classification.​

The Earner’s Levy and Working Safer Levy are both fixed rates.​

The current Earner’s Levy (for the 24/25 financial year) is $1.60 per $100 of liable income, while the Working Safer Levy is $0.08 per $100 of liable income (or liable payroll for employers).​

The calculation of your total levy depends on whether you’re an employer, shareholder-employee or self-employed.​

The easiest way to calculate your levy is by using ACC’s estimation tool.​

Neither Inland Revenue nor your accountant can help with ACC invoices, so this tool is the best way of predicting how much your invoice might be.​

There is no fixed date as it depends on when ACC issues your invoice.​

For employers, invoices are typically issued from July each year based on liable payroll information that is filed with the IRD and then shared with ACC.​

For self-employed and shareholder-employees, invoices are sent once your tax return is filed with the IRD and income info is passed on to ACC.​

The payment deadline is outlined on the invoice, but is approximately 30 days from the invoice date.​

For new businesses, you’ll usually not receive an invoice until your second year of trading, once your first set of tax returns are filed. This means your invoice will generally always relate to the prior year.​

If you have registered a company and are taking a shareholder salary, you may receive a separate ACC invoice under your name.​

Payment options include paying in full or setting up instalments directly with ACC. You can find payment methods and instructions on ACC’s website.​

The Work Levy and Working Safer Levy are tax-deductible as they relate to your business or self-employed income.​

The Earner Levy is not tax-deductible where it relates to shareholder-employees or sole traders as it's cover for non-work related accidents so is not considered a business expense.​

If you’re GST registered and an employer, you can claim the GST on your ACC invoice.​

If you’re GST registered and a shareholder employee, only a portion of the GST on your ACC invoice is claimable. The GST component of the Earner Levy is not claimable since this is cover for non-work related accidents.​

If you’re not registered for GST, you can not claim GST since you do not file GST returns.​

If you receive an ACC invoice that you weren’t expecting, do not panic. It’s a normal part of running a business in New Zealand. ​

If you are unsure about your bill or if your business activities have changed, get in touch with ACC. They are responsible for calculating and issuing these invoices so can assist with any questions you might have.​

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