How we calculate levies

When we work out levies we take a number of factors into account, including what levy group your business and your vehicle sit under.

Understanding our accounts

Understanding how our five accounts works helps explain why and how we calculate different levy rates for different levy payer groups. Find out more at:

How we’re funded – the five ACC accounts

Your business activity

In the Work Account, your levy group is based on your business activity.  For example, a professional athlete has a higher risk of injury at work than an office worker, which means the professional athlete is assigned a different classification unit (CU) and pays a higher work levy.

What are classification units?

The type of vehicle you drive

In the Motor Vehicle Account, your levy group is based on your vehicle class. We group together vehicles with similar characteristics and use data from previous claims, to then calculate the motor vehicle levies.

Some of these vehicle classes are broken down into further risk rated bands, find out what these bands are and the matching levy rates:

Updating vehicle risk rating bands

Your income

The Earner’s Account works differently – everyone is charged the same earners’ levy. The total amount you pay is based on your income – you pay an earners’ levy for every $100 of your income (up to set income limits).

The cost to run an individual risk assessment for each New Zealander would be hugely expensive – and would mean a large increase to the Earners’ levy rate. Instead we focus on community injury prevention programmes to stop the accidents from happening in the first place.

Preventing injuries

Data from past claims

Within the Work and Motor Vehicle Account, we look at past claims. We calculate the number, severity and costs of these injuries and consider how they are changing over time. This information helps us predict how many claims we’ll get from each levy group and what they’ll cost – not just in the next two-year levy period but until each claim has been closed.

The cost to cover these injuries is then spread across each levy group. This means individuals don’t have to carry the large burden a significant injury could bring.

Inflation and economic changes

We allow for a number of other factors including health care costs, wage inflation, long-term discount rates and investment returns. We also consider a ‘funding adjustment’ to allow for any surpluses or shortfalls in our past estimates.

Questions or concerns?

If you have any questions or concerns about your business classification unit, levies or an invoice you’ve received, contact the ACC Business Contact Centre:

Free phone 0800 222 776

Apply for an invoice review

If you’ve been in touch with us and you still have some concerns around your invoice, you can apply for an independent review. You need to apply within three months from the date you receive your invoice.

Invoice review process

Calculate your levy

If you’re self-employed, an employer or an Accredited Employer, use the levy calculators to help estimate your levy based on the rates currently being consulted on for the two year period 2017 – 2019.

You can select from:

  • CoverPlus
  • CoverPlus Extra 
  • Accredited Employers Programme
  • WorkPlace Cover

Calculate my levies

What your levies cover

When you pay your ACC levy invoice, fill up at the petrol station, license your vehicle, or simply go to work, you’re contributing towards helping all injured New Zealanders and visitors.

If you, a friend, colleague or family member is injured at work, home or play, it’s these levies that go towards getting everybody back on their feet.

Salary compensation

The most recognised use of your levies is called weekly compensation. This is the money people receive from us if they’re unable to work due to an injury, which is up to 80% of their salary.

Weekly compensation – loss of earnings

Medical and health

Your levies fund medical treatment, health professionals and support providers that help with injuries. This includes:

  • an ambulance
  • doctor’s visits 
  • physical rehabilitation 
  • surgery
  • dental treatment
  • x-rays
  • prescription costs
  • artificial limbs
  • visual or hearing aids
  • help after sexual abuse or assault
  • travel and accommodation for treatment
  • vocational support.

See the range of medical and related treatment service and costs we cover:

Treatment costs

Managing at home

If you need help managing at home after your injury, we use levies to arrange various types of help for things like:

  • home modifications such as ramps, handrails and chairlifts
  • educational support 
  • childcare 
  • home help 
  • transport to school and work.

Find out more about the different ways we can help:

Managing at home

Other types of support

There are lots of other ways your levies contribute to helping injured people – this depends on the type of injury and the person’s needs.

What support can I get?

Preventing injury

We also invest your levies in injury prevention marketing and programmes to help stop injuries before they happen. By preventing injuries, we can lower the personal impact injuries have on you, your friends and your family – and by reducing them, we don’t need as much money to cover injuries – so you’ll save more.

Learn more about our injury prevention initiatives:

Preventing injuries

What does no-fault mean

Many people confuse the no-fault nature of the ACC scheme to mean that everyone pays the same flat rate in levies and is guaranteed the same cover. The ‘no-fault’ is not about the levies you pay, but instead the cover you receive.

‘No-fault’ means that no matter what you were doing when you were injured, or who was at fault, you’ll be covered by ACC, as long as the injury falls within ACC’s legislation.

What your levies cover

Why use this system

Because our no-fault cover is secured by law, everyone in New Zealand forgoes the right to sue. This is what makes New Zealand and our no-fault accident cover unique in the world.

Systems in other countries based on fault are often controversial and expensive. We want injured people to focus on getting better, rather than worrying about the financial side of accidents.

Basing levies on the cost of injury

We set levies on the severity and cost of injuries – not on fault. Levy-setting and the no-fault concept are not related.

To calculate and set levy rates we consider and balance a number of factors, including the claims we receive for injuries in the past from each levy payer group.

How we calculate levies

Comparing levy groups

If we look at motorcyclists and other motorists – both are covered by the motor vehicle levy. But because the severity and cost of motorcycling injuries are a lot more than injuries involving other motor vehicles, motorcyclists are charged a higher levy.

Similarly, a professional rugby player’s work levy is higher than an office based worker.

In these cases it is not the risk of the activity, but the cost to cover the injuries or accidents while involved in that activity – the higher costs produce a higher levy. This is where ‘no-fault’ comes in – as we’re a no-fault system you’ll receive the same level of cover no matter who you are or how you were injured.

To understand how our levy accounts work:

How we’re funded – the five ACC accounts

Levy setting process

We want to make your levies as fair as possible – we review levies once every two years and make changes to reflect this. As levies are paid by all New Zealanders, everyone has the chance to give feedback on the proposed changes we’re thinking of introducing.

Setting levies every two years

From start to finish the levy setting process takes a whole year, this is covered in six key stages:

1. Calculate new levies

Our Actuarial Team calculate our proposed rates using factors including – claims we’ve received from all New Zealanders, health care costs, investment returns and more. We then prepare proposal documents detailing what we’re thinking about changing, why, and what the new levy rates will be. 

How we calculate levies

2. Gather feedback

We publish our proposals and invite New Zealanders to give their feedback on our proposals during levy consultation. This feedback period is open for a minimum of 28 days. 

3. Review submissions

Once consultation closes, the ACC Board reviews your submissions. They use the feedback to confirm some of the proposals, re- think on others, or introduce new changes. The ACC Board then announces their recommendations. 

4. Recommend rates

The Minister for ACC reviews the finalised recommended rates. They may also seek independent advice from Ministry of Business Innovation and Development and the Treasury.

5. Confirm new levy rates

Cabinet finalises levy rates for the coming levy year.

6. The new rates are in place

Levy regulations are passed and come into effect from 1 April (Work and Earners’ Account) and 1 July (Motor Vehicle Account) in the following year.

Balancing our many influences

Our role is to balance the many factors that influence the ACC scheme. We:

  • help injured people get the support they need,
  • improve the way we engage with businesses and people who are self-employed
  • work to reduce the number and severity of injuries
  • make sure the scheme is sustainable for future generations.

We work hard to make sure we’re as fair as possible for all New Zealanders.  Your feedback during levy consultation is an important part in making sure we’re getting the balance right.