ACC levies are payable by:
businesses based on the level of their wage and salary payments to employees
salary and wages earners based on their income earned, and
business owners based on the amount of their income declared to be their personal income (sole trader business profits, share of partnership profits and shareholder/employee salaries).
The levy for wage and salary earners is deducted from their income via the PAYE system and is struck at a single rate. All other levies are based on invoices rendered to the levy payer by ACC and are at a rate that is reflective of the relative accident risk for the industry category - the higher the risk the higher the levy rate.
The self employed and shareholder/employees are able to move out of the ordinary ACC levy system into a special category called Cover Plus Extra. This is a system that we recommend for all qualifying levy payers for it enables agreement to be reached with ACC on the level of cover required and which will be paid out in the event of an accident without the need to prove a loss of income. This can be a very useful form of cover for those whose income is somewhat variable from one year to the next, and for those who wish to ensure that they have cover that might equate with the cost of engaging suitable replacement staff to cover for the levy payer should they not be able to work for a period of time.
Many people have the view that ACC levies are but another tax and that they should do all that is possible to reduce the financial impact on them. Thus for example, they might retain income in companies and not include it as personal income to reduce the cost of ACC levies. The reality is that ACC is an insurance premium and like all insurance, you get out of it, in the event of a claim, only what you are covered for. Therefore, if an accident would put your business in a position that it's income could suffer, you should have this potential loss covered as effectively as possible by the ACC insurance cover. You should also arrange some other form of insurance for other risk types not covered by ACC.