Here at Johnston Associates, we offer clients the option of being your agent for ACC purposes. ACC invoices may not always be correct and therefore you can end up paying more for your ACC levies than you need to.
The types of errors that we find are:
- Wrong classification rates used, resulting in incorrect charging
- Incorrect liable earnings information
- Being double charged on PAYE and Shareholder salaries
- Incorrect charging of levies where changes to the business structure have been made
We have also found, where a recommendation has been made to clients to consider alternative ACC products, that some clients have not followed up on that advice and are therefore not maximising the opportunities offered by the ACC legislation.
One of the services our firm offers clients is an ACC Administration and Advisory service. This involves our firm acting as your agent for all your ACC related matters. The advantages to you are:
All ACC related information will come to us on your behalf
- We will review the invoices and ensure they are correct
- We will advise you immediately of payments due
- You can rest assured in the knowledge that your levies are correct, and have been minimized
- We will advise you on the best options available to you for your ACC cover
- We will keep you up to date with any changes in ACC legislation that may affect you
What is my ACC levy?
Income that you receive from personal effort is liable for ACC earners’ levy. This levy is charged to cover the cost of rehabilitation and compensation following non-work related injuries.
Your ACC Premiums consists of
- ACC Workplace Cover Levy– your classification unit rate x each $100 of liable earnings.
- Residual Claims Levy– your residual claims levy rate x each $100 of liable earnings.
- Health and Safety in Employment Levy– 5c x each $100 of liable earnings.
The Classification Unit Rate is based on the actual cost of work-related injuries that occur within your classification unit. A classification unit is a group of businesses that operate within a similar industry.
The Residual Claims Levy Rate covers ongoing costs for old injuries that occurred before 1999. In 1999 the ACC funding was changed to cover the full lifetime costs of injuries that occurred in that year. The Government announced in September 2015 that the Residual Claims Levy will cease from April 2016.
Income liable for earners’ levy includes:
- Salary and wages (overtime, back pay, holiday pay, long service leave, bonuses or gratuities and taxable allowances)
- Shareholder-employee salaries
- Salaries to partners in a partnership
- Salary or wages to owners in a look-through company (LTC)
- Active income from a look-through company
- Income from self-employment.
The IRD provide ACC with relevant earnings data from employer monthly schedules. From this information, ACC calculates the total levies due.
Premiums are calculated and paid as follows:
Employees- All employees must pay ACC earners’ levy. This is built into the PAYE tables and is deducted along with PAYE.
Self-employed- ACC invoices you directly for earners’ levy. The IRD supplies income information to ACC to enable them to do this based on your tax returns filed with the IRD.
Shareholder employees- if you receive a regular salary with PAYE deducted then the company deducts earners’ levy as part of your PAYE. If you receive an irregular salary with no PAYE deducted then ACC invoices the company directly for earners’ levy, which is supplied from the IRD to ACC based on the tax returns filed with the IRD.
Employer invoicing by ACC takes place from June each year and is based on employee earnings for the year ended 31 March.
For more information on ACC premiums just give us a call to ensure you are minimising your payments while still maximising your coverage.