The ACC levy is not a tax and Inland Revenue does not collect it — but every earnings figure it uses comes from what you declared to Inland Revenue (IRD). That is why, months after your tax return is done and any refund has landed, an ACC invoice still arrives. This page explains how IRD and ACC connect, which lines on the invoice come from your declarations, and which one you can reduce.
Self-employed: the self-employed income you declare to Inland Revenue is what ACC levies you on. The invoice labels it “Liable income declared to Inland Revenue”.
Employers: the payroll you file with Inland Revenue each payday is added up by ACC into the year’s total. The invoice heads it “Payroll declared to Inland Revenue and ACC”.
Company owners who pay themselves as shareholder-employees: the company’s payments to shareholders also come from what is declared to Inland Revenue, and ACC sends a separate shareholder-employee invoice alongside the company’s employer invoice.
ACC can only finish a year once the full-year figures have come through from Inland Revenue. So an invoice usually has two parts: the final levy for last year, worked out on what was actually declared, less whatever was paid in advance; and the provisional levy for this year, estimated from last year’s earnings with an adjustment for inflation.
The amount due on one invoice is therefore only the balance, not what those two years cost in total. To see what you actually paid, add back what was paid in advance.
Work levy: charged at your classification code’s rate, anywhere from a few cents to several dollars per $100 of earnings. With the wrong code you overpay this every year — this is the line you can reduce.
Earners’ levy: only on self-employed and shareholder-employee invoices (employees’ share comes out of their pay), at one rate for every industry. It does not depend on the code and cannot be reduced this way.
Working Safer levy: the same in every industry, and also unrelated to the code.
What common trades pay, and what a wrong code costs →
ACC invoices include GST. On self-employed and shareholder-employee invoices, the GST on the Earners’ levy is listed separately as “Non-deductible GST”. If you are GST-registered, follow the invoice’s own split: the part listed as non-deductible cannot be claimed; ask your accountant how to treat the rest.
ACC’s assessors work from BIC codes, and the classification unit follows from the BIC. Changing the unit means changing the BIC with Inland Revenue too.
In other words, the industry you picked in a hurry when you started trading, registered a company or registered with Inland Revenue is where your ACC code comes from — the step most often got wrong and then never looked at again for years.
A company that pays wages is an employer and pays ACC for its employees; shareholders who pay themselves get a separate shareholder-employee invoice. Both invoices use the company’s classification code — a wrong code overcharges both, and correcting it corrects both.
No. It is the levy for New Zealand’s accident compensation scheme, collected by ACC, not by Inland Revenue. Only the earnings figures it is worked out on come from what you declared to Inland Revenue.
ACC can only finalise last year once the full-year figures arrive from Inland Revenue, and it bills this year’s provisional levy at the same time. So the invoice always comes some months after the tax return.
That figure comes from what you declared to Inland Revenue. Check what you actually declared, then call ACC on 0800 222 776 to have it recalculated.
The classification unit follows from the BIC code, so changing it means changing the BIC with Inland Revenue too. Asking ACC to change the code costs nothing: employers send form ACC4618 to business@acc.co.nz; the self-employed update it in MyACC for Business or call 0800 222 776.
If the company pays wages, it pays as an employer for its employees; shareholders who pay themselves get a separate shareholder-employee invoice. Both use the company’s classification code, so whether the code is right affects both invoices.
The part listed as “Non-deductible GST” (the GST on the Earners’ levy) cannot be claimed; ask your accountant how to treat the rest.
Drop in your ACC invoice and answer a few questions, and we check it against ACC’s guidebook and the court decisions: whether your code is right, and what a different one would save each year. The check is free; nothing to save, nothing to pay; if there is, NZ$9.90 shows which code and gives you a ready-written English letter.
Check my ACC invoice free → · What common trades pay, and what a wrong code costs →