Do sole traders pay ACC levies?
Yes — as a sole trader, you are required to pay ACC levies. From your first day of self-employment, you are automatically covered by ACC and will receive an invoice based on your income.
What ACC covers
ACC (the Accident Compensation Corporation) provides New Zealand's no-fault personal injury cover. As a sole trader, you're covered for:
- Work-related injuries and illnesses
- Personal injuries (not just at work — ACC covers you 24/7)
- Lost income if you're injured and can't work
In exchange for this cover, you pay ACC levies each year.
The three ACC levies
Sole traders pay up to three separate ACC levies, each covering a different aspect of the scheme:
| Levy | What it covers | Based on |
|---|---|---|
| Earner's levy | Non-work injuries (personal injury outside work) | Flat rate per $100 of liable income |
| Work levy | Work-related injuries | Your type of work (industry classification) + liable income |
| Working Safer levy | Workplace health and safety regulation | Flat rate per $100 of liable income |
The Work levy varies depending on how risky your type of work is classified. A desk-based contractor pays a lower rate than, say, a builder or electrician.
How your levy is calculated
Your levies are based on your liable income — your profit as reported to IRD — between ACC's minimum and maximum thresholds. ACC uses the income information IRD passes on after you file your tax return.
- Minimum liable income: Set by ACC each year (if you earn below this, you still pay the minimum levy)
- Maximum liable income: Levy is capped at this level — you won't pay more above this threshold
To estimate your levy before your return is filed, use the ACC Levy Calculator.
When do you receive your ACC invoice?
ACC invoices self-employed people based on the income reported to IRD after you file your IR3. Invoices are typically issued in the months following the end of the tax year. Payment is usually due within 30 days of the invoice date.
What if you can't pay your ACC levy?
Contact ACC before the due date if you're having difficulty paying. ACC offers payment plans in some circumstances. Ignoring an ACC invoice can result in debt collection action.
Can you reduce your levy?
Yes — by switching to CoverPlus Extra (CPX), you can choose a lower agreed level of cover and pay a levy based on that amount rather than your actual income. See: Can I reduce my ACC bill? for full details.
💡 Lodg can help you understand your ACC levy and build it into your financial planning so it's never a surprise.
Source: acc.co.nz — Understanding levies if you work or own a business | acc.co.nz — Cover for self-employed | business.govt.nz — ACC levies