ACC Guide for Self Employed Individuals / Contractors / Shareholder Employees (updated 2020)

Intel Accountants - Tax Due Dates
Tax Due Dates – GST / Provisional / Terminal / PAYE (updated 2020)
March 24, 2018

ACC Guide for Self Employed Individuals / Contractors / Shareholder Employees (updated 2020)

Intel Accountants_Income Tax

ACC (ACCIDENT COMPENSATION LEVY)

You get the ACC Levies invoice usually once a year. ACC bases their levies on your income return filed with the IRD for that financial year and your declared BIC code.

Levies

If you’re self-employed, a shareholder-employee or a contractor you’ll pay three different levies:

  • Earners’ levy
  • Work levy
  • Working Safer levy

Your Work levy goes into the Work Account to fund cover for injuries and accidents that happen at work or are work-related. It insures and protects your most important assets – you.

Current Work levy rate is $1.21 per $100

This is different for every business. ACC levies is based on:

  • the risk of injury at work
  • the cost to the Scheme
  • your liable income or payroll.

Risk of injury at work

The risk of injury at work depends on your business activity. When you file a tax return with Inland Revenue or register your business for GST, you’ll choose a Business Industry Classification (BIC code). It’s based on your business activity and Inland Revenue sends us your BIC code.

Find your BIC code. You can find your BIC code here: https://businessdescription.co.nz/

ACC use your BIC code to assign you or your business a classification unit (CU). CUs group businesses with similar levels of risk together to decide the levy rate you pay and share the cost of injuries fairly.

For example, a professional athlete has a higher risk of injury at work than an office worker. This means we’ll assign the professional athlete a different CU and they’ll pay a higher Work levy.

The Working Safer Levy

ACC collect this levy on behalf of WorkSafe New Zealand. It goes towards supporting WorkSafe’s activities and injury prevention across the country.

Current Working Safer levy rate: This is a flat rate, currently $0.08 per $100 of your liable income.

Types of ACC Covers

Standard cover – CoverPlus

If you’re self-employed or a contractor you’ll automatically be on CoverPlus. If you’ve had an accident and can’t work, we’ll pay your compensation at up to 80% of your taxable income based on the most recently completed financial year. For example, if you earn $52,000 per year on CoverPlus you’d get up to 80% of that each week, which is $800 before tax.

Weekly compensation payments start a week after your injury, and we’ll also help cover the cost of your treatment and rehabilitation.

CoverPlus Extra

CoverPlus Extra is an optional cover product that allows you to choose how much of your income you want covered if you have an accident and can’t work. We’ll pay 100% of the agreed cover divided into weekly payments until you can get back to full-time work. For example,  if you’re entitled to $52,000 per year as your cover, we’ll pay 100% of that amount each week, which is $1000 before tax.

CoverPlus Extra is especially suited to those who:

  • have fluctuating income, either yearly or seasonal as you’ll know exactly how much we’ll pay out
  • want to apply for more or less cover than your actual income
  • are newly self-employed with no earnings history and want assurances around your cover.

Benefits include:

Your levy invoices are predictable as ACC calculate them by using the level of cover you nominated and agreed with us. So, no surprises at invoice time

Like our standard cover, the injury that leads to time off work doesn’t have to be work-related. CoverPlus Extra covers injuries that happen anywhere, eg at home, on the road, during sports, etc

More control over how much you pay in levies as you can choose to pay a lower levy in return for lower weekly compensation or a higher levy and receive higher weekly compensation.

If you’re not sure what level of cover works best for you, you can contact ACC on:

Phone: 0508 426 837
Email: cpx@acc.co.nz

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