ACC levies for New Zealand small businesses: What you pay and why

Published Saturday 3 October 2026

Table of contents

• What are ACC levies?
• The three ACC levies explained
• Who pays ACC levies?
• How much are ACC levies in 2026/27?
• How does ACC calculate your levies?
• How and when do you pay ACC levies?
• What changed for ACC levies from 1 April 2026?
• How to manage your ACC levy costs
• Stay on top of ACC levies with Xero
• FAQs on ACC levies

Key takeaways

• ACC levies are compulsory payments that fund New Zealand's no-fault accident cover for you and your staff, whether an injury happens at work or off the clock.
• The three levies are the Work levy, the Earners' levy, and the Working Safer levy. As an employer, you deduct the Earners' levy from wages through PAYE and pay the Work levy and Working Safer levy on your payroll.
• For 2026/27 the Earners' levy is $1.75 per $100 of liable earnings, the average Work levy is $0.69 per $100, and the Working Safer levy is $0.08 per $100.
• Rates, thresholds, and instalment rules changed from 1 April 2026, so it pays to check the current figures before you budget.

What are ACC levies?

ACC levies for New Zealand small business owners are payments to the Accident Compensation Corporation (ACC) that fund the country's no-fault accident cover. In plain terms, they're the reason anyone hurt in an accident here can get help without having to sue someone first.

That cover buys real things: treatment, rehabilitation, and income support if an injury stops someone working. It applies to you and your team, so the money you pay in comes back as protection when it's needed. Rather than one bill, ACC splits the cost into three separate levies, and each one does a different job.

The three ACC levies explained

Each levy covers a different type of risk, so it helps to know what each one is for. Here's a quick breakdown of the three.

Work levy

The Work levy covers work-related injuries. Employers and self-employed people pay it, and the rate depends on your Classification Unit, which reflects how risky your type of work is.

Earners' levy

The Earners' levy covers injuries that happen away from work, such as at home or playing sport. Everyone who earns pays it, and as an employer you deduct it from your staff's wages through PAYE.

Working Safer levy

The Working Safer levy is a flat charge that funds WorkSafe New Zealand, the regulator that promotes safe workplaces. Every business pays it at the same rate on liable earnings.

Who pays ACC levies?

If you employ staff, you have two jobs when it comes to ACC. You collect one levy on ACC's behalf, and you pay two of your own.

As an employer, you deduct the Earners' levy from your employees' wages as part of their PAYE. Separately, you pay the Work levy and the Working Safer levy on your liable payroll, based on your Classification Unit.

Sole traders and other self-employed people pay their own levies directly through CoverPlus, worked out from their liable earnings and the type of work they do. Contractors on schedular payments are counted as self-employed for ACC, so they pay levies too.

How much are ACC levies in 2026/27?

Here are the rates and thresholds for the levy year running 1 April 2026 to 31 March 2027. The Earners' levy amounts include GST.

• Earners' levy: $1.75 per $100 of liable earnings (1.75%), with maximum liable earnings of $156,641 and a maximum levy of $2,741.22
• Average Work levy: $0.69 per $100 of liable earnings, which varies by Classification Unit
• Working Safer levy: a flat $0.08 per $100 of liable earnings
• Self-employed liable income band: a minimum of $50,501 and a maximum of $156,641

Your own Work levy could sit above or below the average because it's tied to the injury risk of your industry. You can check the official ACC Earners' levy rates with the Inland Revenue Department.

How does ACC calculate your levies?

ACC works out each levy by calculating liable income divided by 100 and multiplied by the levy rate. The tricky part is knowing what counts as liable earnings and which rate applies to you.

Liable earnings include wages, holiday pay, and overtime. They don't include redundancy or retirement payments. For employers, ACC takes this figure from your employer schedule; for self-employed people, it comes from your income tax return.

Your Work levy rate comes from your Classification Unit (CU), which ACC assigns from your Business Industry Classification (BIC) code. The BIC code describes what your business actually does, and higher-risk work attracts a higher Work levy.

To work out a levy for one person's earnings, follow these steps.

1. Take the liable earnings figure, for example, $60,000.
2. Divide it by 100 to get $600.
3. Multiply by the levy rate that applies.

Here's how that looks for an employee with $60,000 in liable earnings. Their Earners' levy is $60,000 ÷ 100 × $1.75 = $1,050, which you deduct through PAYE.

As the employer, you'd pay the Work levy on the same earnings at the $0.69 average with a calculation of $60,000 ÷ 100 × $0.69 = $414. On top of that, the Working Safer levy is $60,000 ÷ 100 × $0.08 = $48. This uses the average Work levy rate, so your real figure will shift with your own Classification Unit. See the ACC’s guide to understanding levies for more details.

How and when do you pay ACC levies?

ACC invoices you rather than taking payment automatically, so the timing depends on the type of cover you hold. Knowing when the bill lands helps you set money aside in good time.

If you employ staff, ACC invoices you after you file, then annually around July. Self-employed people are invoiced after their annual tax return, usually around September, while CoverPlus Extra is invoiced in April. You can pay by internet banking, by card, or by spreading the cost over instalments.

By default, self-employed people are covered by CoverPlus, which bases your levy on your liable earnings. If you'd rather agree on a set level of cover in advance, you can opt into CoverPlus Extra (CPX) and choose the income you're insured for, which can suit people whose earnings change from year to year.

What changed for ACC levies from 1 April 2026?

A few things shifted at the start of the 2026/27 levy year, and they affect what you pay and how. Here's what to keep an eye on.

• Interest now applies to all new instalment plans. The three- and six-month direct-debit plans that used to be interest-free no longer are.
• The late-payment interest rate has changed, so an overdue invoice can cost more than before.
• Levy rates rose, with the average Work levy moving to $0.69 per $100 and the Earners' levy to $1.75 per $100.
• The maximum liable earnings increased to $156,641, so higher earners pay levies on a larger slice of income.

How to manage your ACC levy costs

You can't opt out of ACC levies, but you can stay in control of what they cost and avoid surprises. These practical steps help you keep on top of them.

1. Check your Classification Unit is right. The wrong code can mean you're paying a higher Work levy than your work warrants.
2. Keep accurate payroll and income records, since your levies are calculated straight from those figures.
3. Consider CoverPlus Extra if you'd like a predictable, agreed level of cover rather than one that moves with your earnings.
4. Look into the No Claims Discount, which can reduce your levy if your business has a clean claims history.
5. Budget for the annual invoice by setting a little aside each month so the bill doesn't dent your cash flow.

Sound payroll habits make all of this easier, and there are plenty of small business guides to help you build them.

Stay on top of ACC levies with Xero

ACC levies are far less stressful when your payroll and income records are accurate and up to date, because that's exactly what your levies are calculated from. With online payroll built into your accounting software, wages, holiday pay, and PAYE are tracked in one place, so you have clean figures ready when the invoice arrives and a clearer view of what to set aside. See how it works and

Get one month free.

FAQs on ACC levies

Here are quick answers to questions small business owners might ask about ACC levies.

Do sole traders have to pay ACC levies?

Yes. Sole traders are treated as self-employed, so they pay Work, Earners', and Working Safer levies through CoverPlus based on their liable earnings.

How much is ACC for self-employed people?

It depends on your liable income and the type of work you do, calculated on income between $50,501 and $156,641 for 2026/27. Your Work levy rate is set by your Classification Unit.

What is the minimum income for ACC levies?

For self-employed people in 2026/27, the minimum liable income used to work out levies is $50,501, even if you earned a little less.

Are ACC levies tax deductible?

Whether you can claim ACC levies as a business expense depends on your situation. The Work and Working Safer levies paid on business or self-employed income are generally claimable, while the Earners' levy taken from an employee's wages isn't a business cost. Check the rules for your circumstances on Inland Revenue's guide to claiming expenses.

What happens if you pay your ACC levy invoice late?

Late payment now attracts interest, and from 1 April 2026 that rate changed, so a missed due date costs more. Paying on time or setting up an instalment plan early keeps those extra charges down.