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How to understand your ACC invoice

ACC essentials for Kiwi Contractors and Freelancers

ACC issue invoices annually to self-employed contractors, freelancers, and sole traders. For those who are new to self-employment, these invoices often come as a huge surprise. 
They can also be confusing and difficult to understand.
Below, we’ll take you through your ACC invoice to help you understand what it means.


About ACC Levies

All New Zealanders are required to pay ACC levies. ACC uses the money gained from these levies to fund universal coverage for injury claims for all New Zealanders.

For permanent/salaried earners, ACC levies are paid as part of your PAYE Income Tax. This happens automatically, which means permanent/salaried employees don’t need to think or worry about ACC.

If you’re a business or self-employed individual, however, you will need to pay ACC levies in addition to your income tax, GST, and student loan payments.

This is true even if you earn just a small amount self-employed income in addition to a permanent/salaried role. In that case, you would still be required to pay ACC levies in proportion to your self-employed income.


ACC Invoices and when to expect them

ACC sends annual invoices to self-employed earners.

Seasoned self-employed individuals will expect this invoice and budget in advance for it.

Newcomers to self-employment, however, often aren’t expecting to be invoiced, and are caught off guard when they’re slammed with an invoice for thousands of dollars in the middle of the year. It’s especially discouraging for contractors and freelancers who are just starting their journey into independent earning.

ACC invoices are usually sent out from 1 July; however, due to the COVID-19 pandemic, ACC invoices for the 2019/20 financial year will now be issued in October 2020.

ACC levies for the 2021/22 financial year should revert back to being issued in July.


ACC Invoices for self-employed individuals

For an self-employed individual, your ACC levy is made up of three components:

  • Earners’ Levy - this funds injuries that happen during everyday, non-work activities
  • Work Levy - this levy funds injuries that happen at work
  • Working Safer Levy -  this levy collected to support Worksafe NZ, New Zealand’s primary workplace health and safety regulator

If you earn self-employed income in addition to a permanent/salaried role, you are still required to pay ACC levies for your self-employed work.


Declaring Your Industry or Type of Work

This is important.

Your ACC levy rate is charged based on the type of work you do - that’s because some industries are more high-risk than others. A skydiving instructor, for example, will have a higher levy rate than a bookkeeper.

When IRD passes your details to ACC, they include the Business Industry Classification (BIC) code from your tax return or GST registration.

ACC uses this BIC code to assign you a classification unit (CU). This is the code that best describes your business activity and determines how much in ACC levies you are required to pay. If ACC doesn’t know what you do for a job then this code will be defaulted to a Manufacturing code which attracts the highest levy rate.

Paying too high a rate with ACC is one of the most common mistakes we see self-employed individuals make, and it’s usually because ACC assigned them the default Manufacturing code. You can check what CU you’ve been assigned using the MyACC for Business website.  

If you need to change your CU, you can find out your correct code on the Business Industry Classification Code website.

If you’ve already received an invoice on an incorrect CU, then you will need to contact ACC to update your account to the correct code and wait for them to issue you with a credit before making payment to them for the remaining balance.


Understanding your ACC documents

There are three types of documents you might receive from ACC depending on your ACC product and payment status. The documents are:

We’ll go over how to understand each of those documents below.


Understanding your ACC CoverPlus Invoice:

Classification Unit (CU): 

This is the code that best describes your business activity and determines how much in ACC levies you are required to pay. Again, if ACC don’t know what you do for a job then this code will be defaulted to a Manufacturing code which attracts the highest levy rate. 

Assuming you are not in Manufacturing, you can find out your correct code at You will need to contact ACC to update your account to the correct code and wait for them to issue you with a credit before making payment to them for the remaining balance (see below section “Understanding your ACC CoverPlus Credit”).


Employment Status: 

If you work on average of less than 30 hours per week, and earn less than $36,816 then this should show as “Part-time” on your invoice, otherwise “Full-time” is correct.

If you’re full-time, you will be charged levies based on the minimum income amount of $36,816, even if you earn less than this in self-employed income.  If you earn over $36,816 then your levy rates will be based on your actual earnings as declared to ACC by IRD.

If you work part-time you won’t be affected by the minimum income amount. ACC will base your levies on your actual liable income (see below).


Liable income you declared to Inland Revenue: 

As a self-employed individual, your liable income is based on the income information you declared with Inland Revenue on the IR3 Individual income return.


Understanding your ACC CoverPlus Credit:

This is where ACC’s system gets confusing, especially for first-time self-employed individuals.

The most common misunderstanding of an ACC credit is that it means you no longer have a bill to pay - this is NOT correct.

Any credit note issued is a credit against the original invoice issued to you by ACC.

For example, let’s say your original invoice was for $984.77,but ACC had the wrong details for you on the invoice (e.g. Classification Unit, or Employment Status). Your first step will be to contact ACC and get those details updated. ACC will subsequently issue you a credit much like the $422.67 ACC CoverPlus Credit in the image above.

This credit serves to reduce the amount owing to ACC down to $562.10 ($984.77-$422.67), which you will need to pay using the payment reference details included on the original invoice.   


Understanding your ACC Coverplus Extra Invoice:

You will only be on Coverplus Extra if you have arranged this directly with ACC. Coverplus Extra is a more bespoke insurance policy, based on your individual circumstances, rather than the general coverage offered by ACC’s standard Coverplus policy.


CPX option: 

This is the name of the ACC policy you are covered by.


Agreed level of cover:

This is the level of cover that you agreed with ACC and that your levies are paid against. Unlike ACC CoverPlus, this is not based on your liable income but rather an amount of cover that you agree on with ACC.



ACC’s invoices and its system can be really confusing, especially for individuals who are new to self-employment.

The most important things for you to consider are:

  • Ensuring that your Classification Unit (CU) is correct on your invoice. If you need to update it you can do so on the MyACC for Business website.
  • Not assuming that your ACC CoverPlus Credit means you don’t have to pay. Most of the time this credit simply means that your amount owing to ACC is reduced, rather than completely eliminated.


If you have questions about your invoice, your best course of action is to get in touch with ACC directly.

We are also happy to answer any questions you might have - simply open up the chat in the bottom right corner of this window.


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