ACC (Accident Compensation Corporation) provides no-fault accident cover to all New Zealanders, including self-employed people. Unlike employees who have ACC automatically deducted through PAYE, self-employed people manage their own ACC levies — and have a choice between two cover types that can significantly affect their income protection.
Self-employed people automatically get CoverPlus — ACC compensates for lost earnings at up to 80% of your prior year's net profit. If your earnings fluctuate or you want a fixed weekly benefit regardless of actual earnings, switch to CoverPlus Extra. ACC levies are paid via your income tax assessment. For 2025–26, the working levy rate varies by industry — typically $0.67–$4.00+ per $100 of liable earnings. Claim ACC as a business expense on your IR3.
ACC Cover Types for Self-Employed
CoverPlus (Default)
CoverPlus is the default ACC cover for self-employed people. It pays up to 80% of your net profit from your prior year’s tax return if you have an accident and cannot work.
Key features:
- Based on prior year’s Schedule 8 (net business profit)
- Covers work-related AND non-work accidents 24/7
- No need to apply — you are automatically covered
- Weekly compensation is 80% of prior earnings, up to the maximum (approximately $140,000 per year)
Limitation: If your income varies significantly year to year, CoverPlus compensation may not reflect your current earnings. If you earned $30,000 last year but $90,000 this year, and you have an accident, ACC pays based on last year’s lower income.
CoverPlus Extra
CoverPlus Extra lets you agree on a fixed level of cover with ACC, regardless of your actual earnings:
Key features:
- You agree a weekly compensation amount upfront (minimum: $500/week; maximum: the ACC earnings cap)
- ACC pays that agreed amount if you have an accident — no questions about prior earnings
- Useful for new businesses with little income history
- Useful for high-income earners who want certainty
- You pay a slightly higher levy to fund the agreed benefit
Who benefits from CoverPlus Extra:
- People with growing businesses (current earnings far above last year)
- New self-employed people with no prior income history
- Anyone who wants a guaranteed weekly payment without negotiating with ACC after an injury
To apply, contact ACC directly at acc.co.nz or through an insurance broker.
ACC Levies: How Much Do You Pay?
ACC levies for self-employed people have three components:
| Levy component | Who pays it | What it funds |
|---|---|---|
| Working/earners’ levy | Self-employed | Weekly compensation when you cannot work |
| Work levy | Self-employed | Work-related injury costs in your industry |
| Earners’ levy | All earners (incl. employees) | Non-work injuries |
The work levy rate varies by industry (based on claim history). Common rates for 2025–26:
| Industry | Approximate work levy (per $100 liable earnings) |
|---|---|
| Office-based / professional | $0.67–$1.20 |
| Retail, hospitality | $1.00–$2.00 |
| Trades, construction | $2.50–$5.00 |
| Forestry, farming | $5.00–$14.00+ |
The total levy (all components combined) is typically $1.00–$5.00 per $100 of liable earnings for most self-employed people.
Liable earnings are your net taxable self-employment income, up to the maximum liable earnings cap (approximately $142,283 for 2025–26).
How ACC Levies Are Invoiced and Paid
Unlike employees (who have ACC deducted automatically from pay), self-employed people are invoiced directly:
- File your IR3 — your net business profit is reported to IRD
- IRD shares data with ACC — ACC issues a levy invoice based on your income
- ACC invoice arrives — usually several months after the tax year ends
- Pay the invoice — ACC accepts online payment, direct debit, and instalments
ACC also sends a provisional levy invoice for the current year based on your prior year’s earnings, so you may receive two invoices in one year when you first become self-employed.
ACC as a Business Expense
ACC levies are deductible business expenses — include them in your IR3 under business expenses. This reduces your taxable income.
What ACC Covers
ACC covers personal injury caused by an accident — including:
- Work-related accidents (falls, equipment injuries, strains)
- Non-work accidents (car accidents, sports injuries, home accidents)
- Accidents while travelling
ACC covers:
- Medical treatment costs (doctors, hospital, surgery)
- Rehabilitation costs
- Weekly compensation (80% of income if you cannot work)
ACC does not cover:
- Illness or disease (e.g., heart attack, cancer, burnout) — this is a critical gap
- Mental health conditions not caused by a physical injury
- Gradual process injuries (repetitive strain) may be covered but are assessed case-by-case
For illness cover, self-employed people should consider income protection insurance from a private insurer (partners like Southern Cross, Asteron, AIA offer NZ income protection policies).
Frequently Asked Questions
I just started my business. How does ACC work if I have no prior year income?
In your first year, ACC will use your estimated or current year’s income as the basis. CoverPlus Extra is especially valuable when starting out — you lock in a known weekly benefit without needing an income history.
Can I opt out of ACC?
No — ACC is compulsory for everyone who earns income in NZ, including self-employed people and employees. You cannot opt out. However, you can choose your cover type (CoverPlus or CoverPlus Extra).
I’m a contractor (not a sole trader). Do I pay ACC?
It depends on your tax status. If you are taxed as self-employed (paying income tax on net profit), you pay ACC levies as a self-employed person. If you are a shareholder-employee of your own company, your company may pay ACC on your shareholder salary via PAYE.
My business had a loss this year. Do I still pay ACC?
ACC levies are based on liable earnings (net profit). If your net profit is zero or negative, your liable earnings are zero and you pay minimal ACC levies. You are still covered.