Understanding ACC levies: What NZ business owners need to budget for
ACC levies are a mandatory business cost in NZ. Here's how they work and what to budget for.
Chesney McDonald–Small business & finance writer/editor. Read Chesney's full bio
Published Tuesday 20 October 2026
Table of contents
Key takeaways
- ACC levies are mandatory payments every NZ business makes to fund injury cover, and they're separate from income tax.
- There are three levies you need to know about: the Earners' Levy, Work Levy, and Working Safer Levy, each covering different types of injury.
- Your levy amount depends on your liable income, industry classification unit, and claims history.
- Work and Working Safer levies are tax-deductible business expenses, but the Earners' Levy is not.
What are ACC levies?
ACC levies are compulsory payments that every NZ business and self-employed person makes to the Accident Compensation Corporation (ACC). They fund New Zealand's no-fault personal injury scheme, which covers everyone in the country regardless of who caused the accident.
ACC is a mandatory cost of doing business in New Zealand, separate from private insurance. The levies fund rehabilitation, medical treatment, and income replacement for people who suffer accidental injuries, whether at work or in everyday life.
ACC levies are separate from income tax, although they're collected alongside your tax obligations. If you employ staff, you'll pay levies based on your payroll. If you're self-employed, ACC will invoice you directly based on your taxable income.
The 3 types of ACC levies
There are three distinct levies, and each one covers a different category of injury. Understanding which levies apply to your business helps you plan your costs more accurately.
Earners' Levy
The Earners' Levy covers non-work injuries, such as accidents at home, playing sport, or during everyday activities. Every person who earns income in New Zealand pays this levy.
For the 2026/27 year, the Earners' Levy is $1.75 per $100 of liable income including Goods and Services Tax (GST) ($1.52 excluding GST), up from $1.67 in 2025/26. Liable earnings are capped at $156,641, so the maximum levy is $2,741.22.
If you employ staff, the Earners' Levy is deducted from their wages through Pay As You Earn (PAYE). If you're self-employed, ACC invoices you directly.
Work Levy
The Work Levy covers workplace injuries and occupational diseases. Only employers and self-employed people pay this levy.
Unlike the Earners' Levy, the Work Levy rate isn't the same for everyone. It varies by classification unit, which is ACC's way of grouping businesses by industry risk. A construction company will pay a higher Work Levy rate than an accounting firm because construction carries more risk of workplace injury.
Your Work Levy is calculated based on your liable income or payroll and your business's claims history.
Working Safer Levy
The Working Safer Levy funds WorkSafe NZ, the government's workplace health and safety regulator. It's a flat rate of $0.08 per $100 of liable income, and every employer and self-employed person pays it.
This levy is straightforward because the rate is the same across all industries.
How ACC levies are calculated
ACC uses a simple formula to calculate your levies. Your liable income is divided by 100, then multiplied by the relevant levy rate.
(liable income / 100) × levy rate = levy amount
Liable income covers wages, salary, holiday pay, and overtime. Redundancy payments and retirement payments are excluded.
For the 2026/27 year, the minimum liable income for self-employed people is $50,501 and the maximum is $156,641. If you work part-time, ACC levies you on your actual liable income instead.
Worked example of levy calculations
If you're a self-employed consultant earning $80,000 per year, your levies for 2026/27 would be calculated as follows:
- Earners' Levy: ($80,000 / 100) × $1.75 = $1,400 (including GST)
- Work Levy: ($80,000 / 100) × your classification unit rate (for example, $0.12 for management and consulting services) = $96 before GST
- Working Safer Levy: ($80,000 / 100) × $0.08 = $64 before GST
- Total estimated levies: about $1,584 including GST
The Work and Working Safer rates in ACC's levy guidebook exclude GST, so $160 becomes $184 once 15% GST is added.
Your actual Work Levy rate depends on your specific classification unit. You can estimate your upcoming levies using ACC's levy estimator, or work out the specific levy amount you owe with the ACC levy calculator.
What are ACC classification units?
ACC groups businesses into classification units (CUs) based on their industry and the type of work they do. Each classification unit has its own Work Levy rate that reflects the injury risk associated with that industry.
Your classification unit is determined by your Business Industry Classification (BIC) code. This is assigned when you register your business, but it's worth checking that it's correct. If your BIC code doesn't accurately reflect what your business does, you could be paying more than you should, or less, which may cause problems later.
You can check your BIC code at businessdescription.co.nz or look up the Work Levy rate for your classification unit in ACC's levy guidebook, available on the ACC website.
If you think your classification unit is wrong, contact ACC to request a review. Getting the right code ensures you're paying the correct amount.
Who pays which ACC levies?
Different levies apply depending on your role in the business. Here's a breakdown of who pays what:
- PAYE employees: pay the Earners' Levy only, deducted from their wages by the employer
- Employers: pay the Work Levy and Working Safer Levy, invoiced directly by ACC based on payroll
- Self-employed people and sole traders: pay all three levies, invoiced by ACC based on taxable income
- Shareholder-employees: pay all three levies on their shareholder salary
If you're both an employer and a shareholder-employee, you'll receive separate invoices for your employee payroll levies and your personal shareholder salary levies.
ACC coverage options for self-employed
If you're self-employed, you have two coverage options that determine how much income replacement you'd receive if you were injured and couldn't work.
CoverPlus
CoverPlus is the standard cover for self-employed people. If you're injured and can't work, it provides compensation at 80% of your previous year's taxable income. Your levies are calculated based on your actual earnings from your most recent tax return.
CoverPlus works well if your income is relatively stable from year to year, because your coverage level automatically reflects your actual earnings.
CoverPlus Extra
CoverPlus Extra gives you more control over your coverage. You choose the amount of income you want to be covered for, and your levies are fixed at that level regardless of what you actually earn.
This option is particularly useful if you're a new business owner without a full year of income history, or if your income varies significantly from year to year. With CoverPlus Extra, your levy invoice arrives in April rather than September, giving you a different payment timeline to plan around.
Budgeting for ACC levies
ACC levies are an annual cost, but they don't have to catch you off guard. Planning ahead makes it easier to manage the payment when your invoice arrives.
Here's when to expect your ACC invoice:
- Employers: receive their Work Levy and Working Safer Levy invoices in July each year
- Self-employed on CoverPlus: receive their invoices in September, after their tax return is filed
- Self-employed on CoverPlus Extra: receive their invoices in April
You can pay your levy in full on the due date or spread payments over three, six or 10 monthly instalments. ACC charges interest on all instalment plans set up from 1 April 2026.
To avoid surprises, set aside a percentage of your income each month to cover the annual levy. A simple approach is to estimate your total levies for the year using ACC's levy estimator, then divide by 12 and transfer that amount into a separate account each month.
It's also worth factoring ACC levies into your pricing and cash flow forecasting. They're a predictable, recurring cost, so building them into your financial planning from the start helps you stay on top of your obligations.
Tax treatment of ACC levies
ACC levies are treated differently come tax time, so knowing which ones you can claim helps you get the deduction right.
The Work Levy and Working Safer Levy are tax-deductible business expenses. You can claim these as a deduction when you file your income tax return.
The Earners' Levy covers personal, non-work injuries, so it falls outside business deductions for sole traders and shareholder-employees.
If you're a GST-registered employer, you can claim the GST component on your ACC invoices. GST on the Earners' Levy component is generally not claimable, so check with your accountant how this applies to shareholder-employee levies.
Keep your ACC invoices with your business records for easy reference at tax time. The ACC website has detailed guidance on the tax treatment of levies.
Ways to reduce your ACC levies
There are several approaches to lower what you pay in ACC levies over time. Most of these reward businesses that maintain safe workplaces and manage claims well.
No Claims Discount (ended)
ACC ended the No Claims Discount from 1 April 2026, so self-employed people and small businesses no longer get it automatically. Keeping claims low still matters if your business grows into Experience Rating.
Experience Rating
Your business is part of ACC's Experience Rating programme if it has paid a Work Levy of $10,000 or more a year for three years in a row. The programme adjusts your Work Levy based on your claims history compared to your industry average. A claims record better than the average for your classification unit can earn a discount of up to 50%, while a worse one can bring a loading of up to 100%.
This programme gives larger businesses a direct financial incentive to invest in workplace safety and effective injury management.
Accredited Employer Programme
The Accredited Employer Programme allows you to manage your own workplace injury claims in exchange for a levy discount. You take on the responsibility for managing and paying injury claims for your employees, and ACC reduces your Work Levy accordingly.
This option requires meeting ACC's accreditation standards and is best suited to larger businesses with the resources to manage claims effectively. The potential savings can be significant for businesses with good safety records.
Simplify your ACC levy tracking with Xero
Keeping track of ACC levies alongside your other business expenses can be simple. Xero's cloud-based accounting software helps NZ business owners manage their finances in one place, including bank reconciliations, expense tracking, tax obligations and cash flow forecasting.
With Xero, you can categorise your ACC levy payments, monitor deductible expenses, and generate reports that give you a clear picture of your business costs throughout the year. That way, you're always prepared when your ACC invoice arrives.
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FAQs on ACC levies
Here are answers to common questions NZ business owners have about ACC levies.
How much are ACC levies in NZ?
Your total depends on your income, the number of employees on your payroll, and your industry's classification unit rate. ACC's levy estimator gives you a personalised estimate before your invoice arrives.
What happens if you have the wrong classification unit code?
If your classification unit has been wrong, ACC may review your past levies, which could result in a refund or an additional charge. Provide evidence of your actual business activities when requesting a review.
Are ACC levies affected by changes to your business structure?
Yes. If you change your business structure, for example from sole trader to a company, your ACC levy obligations may change. Contact ACC to update your details so your classification unit and coverage type reflect your current structure.
When do ACC levy rates change?
ACC reviews and publishes updated levy rates each year, typically taking effect from 1 April. It's good practice to check the ACC website annually so you can adjust your budget for any rate changes.
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