ACC for Contractors and the Self-Employed in New Zealand
If you contract for yourself in New Zealand, ACC cover starts automatically the day you start trading , but two things catch contractors out. What you pay is set by an industry classification code, not by how carefully you work. And what ACC would pay you after an accident is calculated from tax returns you have already filed, so your cover can trail a year or more behind what you actually earn. If your income is lumpy, seasonal or growing, that lag is the whole problem.
Your classification unit sets your work levy
When you register for GST or file a return you choose a Business Industry Classification (BIC) code. ACC converts it into a Classification Unit (CU), which groups levy payers of similar injury risk and carries its own rate, as ACC's levy invoice guidance explains.
The spread between CUs is wider than most contractors expect. These are the Work Account levy rates per $100 of liable earnings for the 2026/27 tax year, set in regulation and quoted exclusive of GST:
| Classification unit | CU | Work levy rate |
|---|---|---|
| Computer systems design and related services | 78340 | $0.02 |
| Accounting services | 78420 | $0.03 |
| Real estate services | 77200 | $0.16 |
| Electrical services | 42320 | $0.68 |
| Plumbing services | 42310 | $1.35 |
| Carpentry services | 42420 | $1.76 |
| Roofing services | 42230 | $2.25 |
For context, the average work levy across all industries for 2026/27 is $0.69 per $100 of liable earnings, GST exclusive. A software contractor and a roofer earning identical money pay work levies differing by around a hundredfold, because the levy is priced to the pool's injury history, not the individual.
That makes your BIC code a financial decision, not an admin box. If your work has shifted since you registered, you can sit in the wrong pool for years. ACC lets you view and correct your CU in MyACC for Business, and sets out what it uses to calculate a self-employed levy.
What appears on a CoverPlus invoice
Standard cover for a self-employed person is CoverPlus, and the invoice carries three levies: the work levy, the earners' levy and the Working Safer levy.
- The earners' levy for 2026/27 is charged at a flat $1.75 per $100 (1.75%), GST inclusive, on earnings up to $156,641, giving a maximum earners' levy of $2,741.22.
- The work levy is your CU rate applied to the same liable income, capped at the same $156,641 maximum of self-employed earnings for the 2026/27 tax year.
- The Working Safer levy is collected for WorkSafe New Zealand, and on a CoverPlus Extra invoice it is charged at a flat 8 cents for every $100 of agreed cover.
There is also a floor. If you worked an average of more than 30 hours a week and earned less than $50,501 in the 2026/27 tax year, your levy is calculated on $50,501 minus any earnings you received as an employee. Part-timers escape this: ACC treats an average of 30 hours or less a week over a tax year as part-time and levies actual liable income.
How ACC assesses lumpy income
ACC does not look at your last three invoices. It runs one of three calculations, depending on how many tax year ends you have passed.
| Your stage | What ACC uses | Divided by |
|---|---|---|
| Newly self-employed (no tax year end passed) | Only PAYE earnings in the 52 weeks before injury | Weeks worked |
| Recently self-employed (one tax year end passed) | Declared earnings from the last tax year plus PAYE earnings in the prior 52 weeks | Weeks worked |
| Established (two or more tax year ends passed) | The same earnings basis as "recently self-employed" | 52, regardless of weeks worked |
ACC then pays up to 80% of that average weekly figure, before tax and deductions.
Read the third row again. Once you are established, ACC divides by 52 regardless of how many weeks you worked. A contractor with eight strong months and four between contracts has that gap baked into the weekly figure. A seasonal operator , shearing, tourism, summer construction , is assessed on a flattened annual average, not on what they earn in the months they work.
There is a floor here too. The gross minimum rate of weekly compensation for a full-time earner from 1 April 2026 is $766.40, equal to 80% of the adult minimum wage of $958.00 for a 40-hour week. If you keep earning while being paid, ACC adjusts the payment down , this is called abatement, and you must tell ACC as soon as your income changes or you will be asked to repay the difference.
The lag between earning and being assessed
All of this runs off Inland Revenue data, so it always looks backwards. Your CoverPlus invoice is issued around September each year, after Inland Revenue passes ACC the earnings from your IR3, and standard compensation is based on your taxable income for the most recently completed financial year.
Double your income this year and you are levied on last year's smaller number , and would be compensated on it too. Have one bad year and recover, and the bad year is what ACC pays from. ACC offers interim, estimated and advance payments where a return is not yet filed, and recalculates once it is in, paying any shortfall or recovering any overpayment , a reconciliation, not a fix for the lag.
Year one is the thin year
Cover exists from day one, but in year one the numbers are unhelpful in both directions.
On levies, if you are newly self-employed you are invoiced on liable earnings up to a maximum of the statutory minimum liable earnings amount for the first year. Small invoices can disappear altogether: the exempt amount for a self-employed person's invoice including the work levy is $40.
On compensation it is starker. Before you pass a tax year end, ACC uses only your PAYE earnings from the 52 weeks before the injury, because your self-employed earnings are not yet declared. ACC states plainly that if you had no PAYE income in that window and do not qualify for the full-time minimum rate, your payment may be zero dollars.
Someone who resigns from a salaried job and starts contracting a month later carries useful PAYE history for a while. Someone coming from study, overseas or a break does not.
Shareholder-employees
Run your work through a company and the rules change again. Workplace Cover is the standard cover for all shareholder-employees. PAYE shareholder-employees are levied under the company's employer policy. For non-PAYE shareholder-employees, ACC invoices the company through July and August for the work, earners' and Working Safer levies, with both a final wash-up for last year and a provisional charge for the year ahead. Non-PAYE shareholder-employees can also apply for CoverPlus Extra themselves.
CoverPlus Extra: the fix for irregular income
CoverPlus Extra (CPX) is optional cover where you agree a fixed amount with ACC in advance. ACC aims it at people who have fluctuating or seasonal income, or are newly self-employed with no earnings history.
The mechanics differ. Under standard cover you must prove loss of earnings at claim time and abatement applies; under CPX no proof of loss is required and payment is based on 100% of the agreed amount until you are fit to return to full-time work. Both carry a seven-day waiting period. CPX must be in place before the accident, is financially assessed at application, and rolls over automatically each 31 March with invoices issued around April.
CPX solves the assessment problem. It does not solve the coverage problem.
Where ACC stops, whatever cover you choose
ACC is an accident scheme. It does not cover illness, sickness or contagious diseases, conditions related to ageing, most hernias, or injuries that develop over time unless a work activity is causing them.
For a contractor that stacks four exposures: illness is not covered, standard cover replaces only up to 80% of income, nothing is paid during the seven-day waiting period, and your assessed income may not resemble what you earn now. A cancer diagnosis, a degenerative back condition or a heart event produces no ACC payment , and there is no employer sick leave behind you.
That is the case for private income protection alongside ACC rather than instead of it. We cover the arithmetic in the ACC gap explained, the exclusions in what ACC does not cover, and the interaction in ACC versus private insurance. The ACC gap calculator shows the shortfall against your own numbers.
What to do next
Check your CU code in MyACC for Business and confirm it still describes your work. If your income is seasonal, or you are in your first two years, weigh CPX against standard cover. Then work out what happens to your household if you are off for six months with something ACC does not touch.
If you want a second set of eyes on that, start a comparison with QuoteHub. We will compare what the market offers against how you actually earn, and talk it through with you , no obligation.
The information in this article is general in nature and is not personalised financial advice. ACC figures are current for the 2026/27 levy year and change each 1 April. QuoteHub is operated by Craig Smith Business Services Limited, a licensed Financial Advice Provider, FSP712931.
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