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Oct 05
ACC self-employed guide

ACC Guide for Self-Employed

All self-employed kiwis need to pay ACC (Accident Compensation Corporation). ACC levies aren’t as widely known as other taxes and can sometimes come as a surprise for new sole traders. But don’t worry, this article will take you through what ACC is, how it works and what you need to do.

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What is ACC?

Everyone who works in New Zealand pays ACC levies. These levies cover injuries that happen at work, at home, on the sports field, and when you’re out and about. Basically ACC (Accident Compensation Corporation) is New Zealand public health insurance.

Unlike employees, who have their ACC levies covered by their employer, as a sole trader, you are responsible for covering this levy yourself.

Do I have to pay ACC?

Yes, when you start out as self-employed, you’re automatically on ACC’s CoverPlus. What you pay will be based on your BIC code and your income. There is an exception, if you earn rental property income you do not need to pay ACC on this income.

Your first levy invoice will arrive after you file your first income tax return. ACC invoices will arrive yearly after that, usually in July or August.

Paying ACC levies is not just a legal requirement; it’s a critical component of your safety net. It ensures that if you ever get injured and can’t work, you won’t be left without income. It’s about peace of mind, knowing that you and your family are protected against the financial impact of unexpected injuries.

Tip: Unlike GST and income tax, you can claim 100% of the money that you pay to ACC on your income tax return.

How ACC levies are calculated for the self-employed

As a self-employed individual, your ACC levies are calculated based on:

  1. Your liable income: The income you declare from your self-employment activities to Inland Revenue is the basis for your levies. This includes self-employed income, zero-rated supplies and schedular payments.
  2. Your CU/BIC code: Different types of work have different levels of risk associated with them, which is reflected in your levies. ACC classifies jobs into different categories, each with its levy rate. For example being a jockey or professional rugby player is much riskier than being web designer, so they pay more ACC. Here’s how to find your BIC code.
  3. The levy rates: There are three levies for self-employed; Earners’ levy, Work levy and Working Safer levy. The earners’ levy and working safer levy are both a flat rate that is charged per $100 of liable income. The work levy depends on your CU/BIC code.

ACC also set a maximum and minimum level of liable income each year. When you’re self-employed, you’ll only pay levies on your liable income up to the maximum level.

You can estimate your self-employed ACC levy at any time by using the ACC levy estimate tool.

Tip: If you work part-time (an average of 30 hours or less a week over a tax year) and earn less than the minimum income level ($49,365  for 2025-2026), ACC might incorrectly bill you at the minimum income level. Make sure ACC know that you’re part-time so they invoice you based on your actual income.

Types of ACC cover for self-employed

There are two types of ACC cover available for self-employed. By default you will be on ACC CoverPlus, this is by far the most commonly used option:

  • ACC CoverPlus: The default option where your levy is based on the previous year’s declared income. If you’ve had an accident and can’t work, ACC will continue paying you up to 80% of your taxable income based on the most recently completed financial year.
  • ACC CoverPlus Extra: An optional, customisable plan where you can agree with ACC on a set level of lost earnings compensation. This can be particularly beneficial if your income varies significantly year to year or if you want more certainty about the compensation you would receive.

What do I need to do?

Actually you don’t need to do much. ACC will automatically calculate your levy based on your tax return and post you an invoice. The main thing is knowing that you need to pay ACC and putting money aside to cover it. Here’s some tips that will help:

  • File your tax return: File your income tax return on time so that ACC can calculate your levy and invoice you.
  • Register for MyACC (optional): MyACC for Business is ACC’s online portal where you can update your details, check what you owe and access claims reports. It’s not essential but can be helpful.
  • Put money aside: Getting an ACC bill that you’re not prepared for can seriously affect your business. There are two options for putting money aside:
    • As you receive your income, set aside a percentage (e.g. 30%) and hope that it covers all your taxes.
    • Use Solo to automatically calculate your ACC levy live so you always know exactly how much money to set aside during the year.
  • Pay your levy: Once you’ve filed your tax return, ACC will send you an invoice for your levies. This typically happens around July or August after the end of the financial year. You can pay your levies in a lump sum or opt for an instalment plan if that suits your cash flow better. There are multiple ways to pay available on the ACC website.

How Solo can help

With Solo you always know exactly how much ACC you owe, and how much you can spend. Solo is the only app that calculates your ACC levy live so you always know exactly how much money to set aside during the year. You can also easily claim your ACC levy and reduce your tax bill.

Try Solo for free today and experience a streamlined, stress-free approach to managing your self-employed finances.

Calculating ACC levy for self employed