Recommendations to the Minister

Should we change the levy rate for prime contractors?

This proposal would remove inconsistences in how prime contractors in the construction sector are classified and see all these contractors paying the same levy rate.

Classification of prime contractors

There are inconsistencies in how we classify businesses who offer construction services without directly employing trades professionals. These businesses may employ project managers and quantity surveyors but use sub-contractors exclusively for the trades required.

  • Building completion services (e.g. plastering or carpentry) and property developers who sub-contract all trades work currently have their own CU and pay a lower levy than their sub-contractors.
  • However, prime contractors engaged in building installation (e.g. plumbing or electrical services) or building structure services (e.g. brick laying or roofing) are levied based on the projects they work on, not the work they do, even when they subcontract all trades work.

As an example: a prime contractor specialising in residential construction projects pays a different work levy of $0.44, compared to the subcontracted trades professionals on that job. However, a prime contractor doing similar non-trades tasks but specializing in bricklaying jobs pays the same as a bricklayer i.e. $2.23.

This has led to the prime contractor sector raising concerns about the inconsistency in levy rates within the sector.

We propose all prime contractors across the construction sector should pay the same levy rate.


What it might mean for you

Under this proposal, approximately 600 employers and individuals would receive lower ACC levies. The new levy rate for prime contractors is proposed to be $0.43 in 2022/23, in line with their recent claims history. 

How it would work

Our proposals would result in the changes shown in the tables below.

Classification units (CU)
CU number CU name Proposed changes
42592  ‘Building completion services – all trades subcontracted’ 
  • Disestablish this CU
  • Create new CU (42595) called ‘Construction services and property developers – all trades subcontracted’ (levy rate $0.43 in 2022/23)
  • Move businesses currently in CU 42592 to new CU 42595
42595 (new) ‘Construction services and property developers – all trades subcontracted’
  • Customers currently in CU 42592 move to this new CU
  • Prime contractors who subcontract all trades (e.g. bricklaying, plumbing and electrical) move to this new CU
77110  ‘Residential property operators and developers (excluding construction)’ 
  • Rename CU as ‘Residential property operators’
  • Residential property developers in this CU move to new CU 42595
77120  ‘Non-residential property operators and developers (excluding construction)’ 
  • Rename CU as ‘Non-residential property operators’
  • Non-residential property developers in this CU move to new CU 42595
Levy risk groups (LRG)
LRG number LRG name Proposed changes
323  ‘Plumbing and building completion services’ 
  • Rename LRG as ‘Plumbing services’ 
673 ‘Property development and operation’ 
  • Rename LRG as ‘Property operation and subcontracted construction services’ 
1 Sep 2021
Open for feedback

Tell us what you think about our proposals.

5 Oct 2021
Consultation closes

We’ll review and consider all feedback submitted to us.

Nov 2021
Recommendations to the Minister

Taking account of what you tell us, we’ll make recommendations on levy rates to the Minister for ACC.

Dec 2021
Final decisions by Government

The Government will make the decision on final levy rates, which will take effect next year and be in place for three years.