ACC levies: how the invoice is worked out, and paying it without a cash hole

ACC levies are one of the costs New Zealand owners most often leave out of their planning, partly because the invoice arrives once a year and partly because nobody quite remembers how it was calculated. Both problems are fixable. Once you understand the inputs, you can estimate the bill, build it into your prices and decide whether to pay it in one go or spread it.

What do ACC business levies pay for?

Businesses fund ACC’s cover for work-related injuries through levies. Depending on how your business is structured, your invoice can include the work levy, the earners’ levy (for self-employed people and shareholder-employees whose earnings weren’t taxed through PAYE) and the working safer levy. Employees’ own earners’ levy is deducted through PAYE, so it doesn’t appear on the employer’s invoice.

How is the invoice calculated?

ACC’s formula is the same in every case: your liable earnings multiplied by the levy rate, expressed per $100 of liable earnings. The two inputs come from different places.

Input	Where it comes from	What you can check
Liable earnings	Earnings filed with Inland Revenue: employer schedules, the IR3 for self-employed, the IR4 for shareholder-employees	That the earnings are correct and that minimum and maximum thresholds have been applied properly
Levy rate	Your classification unit, linked to your Business Industry Classification code	That the code still describes what the business actually does

Two details matter for the self-employed. Someone working more than 30 hours a week can be levied on a minimum earnings level even if actual earnings were lower, while part-time earnings (30 hours a week or less) are levied on actual income. And if you have several sources of earnings, a multiple employer adjustment can apply when combined earnings exceed the maximum liable level.

Why does the levy arrive at awkward times?

Because it’s based on earnings already filed with Inland Revenue, the invoice for self-employed people tends to arrive after their tax return is processed, sometimes many months after the year it relates to. If you’ve grown since then, it can be bigger than you expected. If your income dropped, ACC’s estimator and MyACC for Business let you check the figures.

For employers, the work levy follows payroll, so it grows with your team. Our true cost of an employee includes it in the on-costs of each hire.

Pay in full or by instalments?

ACC offers several ways to pay: internet banking, card, direct debit instalments, or at a Westpac branch. The instalment plans spread the invoice over three, six or ten monthly payments, set up through MyACC for Business.

From 1 April 2026, ACC applies instalment interest to all instalment plans, including those that roll over. The formula is based on a floating first mortgage housing rate plus a use-of-money adjustment. Late payment interest is also moving to a formula and will be higher than instalment interest.

The practical upshot:

• If you have the cash, paying in full is now the cheapest option.
• If you don’t, a plan is still far better than paying late.
• Overdue invoices can’t be moved onto a plan through MyACC, so set the plan up before the due date, or call ACC.

Illustrative example

A Dunedin landscaping company with six employees receives a work levy invoice of $7,200. Paying in full would take its bank balance below the minimum it likes to hold in the quiet winter months. It chooses a six-month plan of about $1,200 a month plus instalment interest, and starts setting aside $140 a week towards next year’s invoice so it can pay in full next time.

What changes the size of next year’s levy?

Three things move the invoice from one year to the next. The first is earnings: more staff, higher wages or a better year as a self-employed person all raise liable earnings. The second is the levy rate for your classification unit, which ACC reviews periodically. The third is your own claims and safety record, which can affect levies for larger businesses through ACC’s experience-rating arrangements. You control the first and third more than you might think: an accurate classification, safe work practices and a quick check of the earnings figures each year all help keep the invoice where it should be.

How do you plan for the ACC bill?

• Estimate it in advance using last year’s invoice as a guide, adjusted for any growth in wages or self-employed earnings.
• Set it aside weekly alongside GST and provisional tax, so it isn’t a lump when it arrives. The GST & provisional tax set-aside planner covers the tax side; add ACC as a separate line.
• Build it into prices. ACC is a real cost of every hour worked. Our guide to setting a charge-out rate shows where it belongs.
• Check your classification whenever the business changes what it does.

Our business money calendar puts the ACC invoice in context with GST, provisional tax and payroll dates through the year.

When the levy is one bill too many

An ACC invoice rarely sinks a business on its own. The pressure comes when it lands beside a GST return, a provisional tax instalment and a slow month. If that keeps happening, it’s a sign the business needs more working capital, not just better timing. We can look at unsecured options for trading businesses and property-secured lending; check eligibility here.

A steadier year of bills

The goal is a year where every levy, tax and payroll date is expected and funded. If the gap between what comes in and what has to go out is structural, talk to us. There’s no credit check when you first enquire, your enquiry isn’t sold or passed to other lenders, and a real person on our New Zealand team reads it. Accurate answers on the form make the first conversation far more useful. See if you qualify.