ACC Levies for New NZ Companies: What You Need to Pay

What is ACC and why does your company pay it?

ACC (Accident Compensation Corporation) is New Zealand's universal accident compensation scheme. It covers the costs of treatment and rehabilitation for people injured by accident, regardless of who is at fault. Businesses fund this through levies paid to ACC, calculated as a percentage of earnings.

There are three types of ACC levies that can affect a new NZ company:

1. Work levy (employer levy)

As an employer paying salaries or wages (including to yourself as a director on PAYE), you pay an ACC work levy as a percentage of your employees' earnings. The rate depends on your industry's ACC classification (known as your 'classification unit'). Construction, trades, manufacturing, and other physical industries pay higher rates than office-based businesses.

ACC invoices employers annually, usually in July for the previous financial year. Xero and most payroll software include ACC levy estimates in payroll calculations so you can accrue the cost throughout the year.

2. Earners' levy

This is deducted from every employee's salary (including the director's salary) as part of the PAYE process. In 2025/26, the earners' levy rate is 1.39% of earnings up to a maximum annual earnings cap. It is handled automatically by your payroll software and passed to IRD with your PAYE payment.

3. Self-employed levy (CoverPlus or CoverPlus Extra)

If you are drawing income from the company other than PAYE (for example, as a self-employed contractor or sole trader operating through a company structure), you may pay ACC levies directly as a self-employed person. This covers you personally for lost income if you are injured and cannot work. You can choose standard 'CoverPlus' cover (calculated on your actual earnings) or 'CoverPlus Extra' which lets you agree a fixed compensation level with ACC in advance.

What to expect in year one

In your first year, ACC has no previous earnings to base your levy on. ACC will either estimate your levy based on your industry and projected turnover, or wait until your first tax return provides actual numbers. You will receive an ACC invoice; it is important not to ignore it as unpaid levies incur interest and penalties.

Trades and construction: pay attention to your classification

If your new company is in construction, trades, hospitality, manufacturing, or another higher-risk industry, your ACC work levy rate will be significantly higher than an office-based business. Check your classification unit when you register. If you believe you have been incorrectly classified, you can apply to ACC for a review.

Insurance to complement ACC

ACC covers accident-related injuries and rehabilitation, but it does not cover illness, and the weekly compensation (typically 80% of earnings, capped) may not be sufficient for your needs. Most business owners supplement ACC with income protection insurance and business interruption cover. An insurance broker who specialises in new NZ businesses can advise on what cover makes sense for your industry and income level.

If you would like to be connected with a local insurance broker or accountant who works with new NZ companies, use our free matching service.