ACC Levies Explained
ACC levies for people in business and now rental property profits are payable based on the profit generated from your trading activities. They are also payable on the gross wages paid to your employees. ACC levies are compulsory to cover you and your staff for personal injuries. There are concessions though if you are only part time in your business.
Once your income tax return is filed for a year Inland Revenue will send details of your earnings to ACC – who will then generate an invoice based on your earnings and the type of business you are involved in, and send this directly to you. It is a good idea to check the industry they have you listed under as higher injury risk businesses pay higher ACC levies.
Be warned that ACC invoice for the year that has just passed plus the year that is current – 2 years at once! They estimate the current year based upon the previous year’s figures, and any square up is made once your second year’s income tax return has been filed. ACC does allow the debt to be paid off by monthly instalments, however this will attract an interest charge.
To get an indication of what your ACC levies might be, check out the ACC levy calculator. These levies are all tax deductible except the earner premium payable by shareholders in a company.
Once you have checked your classification/industry rate and how much % per $100 you will pay in ACC levies, it would be wise to put this aside on a regular basis so that you have the funds when the invoice arrives.
Note there are other plans offered by ACC including ACC Cover Plus Extra which is a predetermined amount of cover – there is also a minimum and a maximum that you will pay ACC levies on.