ACC Levy
Every year, thousands of New Zealanders overpay their ACC Levies due to misunderstandings. Could you be one of them?
The ACC Levy funds injury prevention, treatment, and rehabilitation for all NZ residents.
Whether you’re an employee, employer, or self-employed, this guide clarifies your obligations, calculations, and cost-saving strategies.
What is the ACC Levy?
The Accident Compensation Corporation (ACC) Levy is a mandatory payment that funds NZ’s no-fault injury compensation scheme. It ensures anyone injured in NZ—whether at work, home, or on the road—receives financial and medical support.
Key Entities:
- ACC: Administers the levy and manages claims.
- IRD: Collects levies through payroll (PAYE) for employees.
- NZ Government: Sets levy rates annually.
Types of ACC Levies
| Levy Type | Who Pays? | Coverage Example |
|---|---|---|
| Earners’ Levy | Employees | Non-work injuries (e.g., sports accidents) |
| Work Levy | Employers | Work-related injuries (e.g., construction accidents) |
| Motor Vehicle Levy | Vehicle owners | Road accidents (via petrol taxes/registration) |
Why It Matters:
- Employees pay 1.39% of their income as Earners’ Levy (2024 rate).
- Employers pay industry-specific Work Levies (e.g., 0.15% for office work vs. 0.70% for construction).
ACC Levy Rates 2024
2024 Earners’ Levy Rate: 1.39% of gross income (capped at $139,224).
2024 Work Levy Rates: Vary by industry risk.
Table 2: 2024 ACC Levy Rates by Industry
| Industry | Work Levy Rate | Example Business |
|---|---|---|
| Office Administration | 0.15% | Marketing firms |
| Construction | 0.70% | Building contractors |
| Healthcare | 0.25% | Hospitals, clinics |
Calculate Your ACC Levy
For Employees:
- Identify Gross Income: Annual salary + bonuses.
- Apply Earners’ Levy Rate: 1.39% of income up to $139,224.
- Example:
- Income: $70,000
- ACC Levy: 70,000×1.3970,000×1.39973/year**.
For Employers:
- Classify Industry Risk: Use ACC’s classification tool.
- Calculate Total Wages: Sum all employee earnings.
- Apply Work Levy Rate: E.g., 0.15% for office work.
- Total Wages: $500,000
- ACC Levy: 500,000×0.15500,000×0.15750/year**.
ACC Levy Calculation Examples
| Role | Income/Wages | Levy Type | Total ACC Levy |
|---|---|---|---|
| Employee (Retail) | $55,000 | Earners’ | $764.50 |
| Employer (Construction) | $1,000,000 | Work | $7,000 |
Pros and Cons
Table 4: ACC Levy Advantages vs. Drawbacks
| Pros | Cons |
|---|---|
| Covers all injuries, no lawsuits needed | Adds to payroll costs |
| Fast access to medical care | Complex calculations for SMEs |
| Reduces employer liability | No opt-out for employees |
How to Pay Your ACC Levy
- Employees: Levy automatically deducted via PAYE.
- Employers: Pay through IRD with payroll submissions.
- Self-Employed: Receive annual invoices from ACC.
Deadlines:
- Employers: Monthly/quarterly, based on business size.
- Self-Employed: Annually by August 31.
Common ACC Levy Mistakes (and Solutions)
- Mistake: Misclassifying contractors as employees.
- Fix: Use ACC’s online worker classification tool.
- Mistake: Forgetting to update income after a raise.
- Fix: Review levies quarterly using ACC’s calculator.
- Mistake: Missing deadlines for self-employed payments.
- Fix: Set calendar reminders for August 31.
ACC Levy Exemptions and Discounts
Who Qualifies?
- Non-residents working temporarily in NZ.
- Volunteers (covered under organization’s levy).
- Businesses with proven safety certifications (up to 10% discount).
Case Study:
- Company: Auckland-based logistics firm.
- Savings: Achieved 8% Work Levy discount via ACC’s Workplace Safety Discount Program.
Tools to Simplify ACC Levy Management
- ACC Levy Calculator: Official Link
- PAY Calculator: Paye Calculate
- IRD Payroll Guides: Step-by-step compliance tutorials.
- MYOB/Xero: Automate levy calculations in accounting software.
Visual Comparison: Earners’ vs. Work Levy
Key Differences at a Glance
| Feature | Earners’ Levy | Work Levy |
|---|---|---|
| Who Pays? | Employees | Employers |
| Rate (2024) | 1.39% | 0.15%–0.70% |
| Coverage | Non-work injuries | Work-related injuries |
| Collection Method | PAYE deductions | Employer payroll |
- 42% Injury treatment
- 33% Rehabilitation programs
- 25% Prevention campaigns
Conclusion
Proper ACC Levy management prevents penalties, ensures compliance, and supports NZ’s world-class injury care system.