What are ACC Levies and why are they important for your business?

ACC Levies are essential because they support the Accident Compensation Corporation (ACC) in New Zealand, which offers financial assistance to people hurt at work or in other circumstances as well as accident prevention programs. Regardless of who is at fault, these payments guarantee a no-fault system that provides reimbursement for lost wages, medical care, and rehabilitation. This method promotes a safer and more encouraging work environment by protecting both employers and employees.

In New Zealand, the Earners’ levy is paid by all individuals who get a salary. Three separate levies must be paid if you are a contractor, shareholder-employee, or self-employed person:

Earners’ levy
Work levy
Working Safer levy

Employers who have employees are required to pay the following taxes:

Work levy
Working Safer levy.

The ACC Earners' levy

To help with the cost of accidents that occur while you’re going about your daily business, your Earners’ levy is deposited into the Earners’ Account. Additionally, it contributes to the Treatment Injury Account.

How it is Calculated: At present, it is $1.39 per $100 (excluding GST) of your liable income.

How it is paid: This will be paid by your employer if you are a PAYE employee or PAYE shareholder-employee. Like taxes, this is deducted from your income. Following the filing of your tax return, ACC will send you a levy invoice if you are a self-employed person or a non-PAYE shareholder-employee.

The Work Levy

Your work levy is deposited into the Work Account to pay for accidents and injuries that occur on the job or are connected to it. You and your personnel, your most valuable assets, are covered and safeguarded.

How it is Calculated: Every business has a distinct approach to this. Your work levy will be based on:

the possibility of becoming hurt at work and your claims history
your payroll or due income.

The Working Safer Levy

On behalf of WorkSafe New Zealand, ACC collects this levy. It supports nationwide injury prevention efforts and WorkSafe’s operations.

How it is Calculated: At present, it is $0.08 per $100 of your liable payroll or income.

How it is Paid: ACC will send you an invoice to pay the Work levy and Working Safer levy. Following the filing of your tax return and Employer Monthly Schedules, we will obtain your income and payroll information from Inland Revenue.

For more information on ACC Levies and how to calculate them, please visit https://www.acc.co.nz/for-business/understanding-levies-if-you-work-or-own-a-business

Need Help with ACC Levies? We’re Here for You!

At DAD Accountant, we understand that tax matters can be complex and time-consuming for taxpayers. Whether you’re unsure about how to make a payment or need advice on tax obligations, we’re here to help. Our team of experienced accountants can assist you in navigating the intricacies of the New Zealand tax system, ensuring you stay compliant and avoid any unnecessary stress.

26 November 2024