ACC levies #2 – Tips for the Self-Employed
Understanding your invoice
ACC is doing a great job to show what they are charging for, in their ACC levy invoices. As a result, the invoice can be a bit confusing. It is important to understand the invoice and double check that it has been calculated correctly for you. If you’re self-employed, your ACC levy consists of 3 components:
- Helps to cover the accidents that take place while going about your everyday activities. It’s currently set at a flat rate of $1.21 per $100 (excluding GST) of your self-employment income.
- Helps to cover the cost of accidents that happen at work. How much you pay depends on your industry. This can be as low as $0.08 per $100 of self-employed income for someone working in Computer systems design and as high as $5.58 per $100 for someone who is self-employed in Horse racing activities. You can find more rates in this document (under “Levy rates table 2017/2018”).
Working Safer levy
- This is currently set at a flat rate of $0.08 per $100 of your self-employed income. This amount will support WorkSafe to help them prevent injuries around the country and other related activities.
Self-employed people from a higher risk industry usually will pay more in ACC levies
ACC levies for Bosspac clients
Bosspac estimates your ACC levies with a high accuracy. However, there can be some edge cases where ACC doesn’t have enough information about you and they’re making an educated guess about you and your business. If your ACC levy bill is significantly different to what Bosspac estimated you’ll need to pay, there can be a couple of reasons for it:
Part-time vs full-time:
- By default, ACC might put you on the full-time employment status, even if you worked part-time. This means that the minimum ACC levy amount will apply ($29,640 for 2017/18), even if you earned less than the minimum level. And, if you work part-time, that means paying more in ACC levies than you actually should.
- If you did on average 30 hours or less of paid work a week over a tax year, you’re considered to have worked part-time. This means that you won’t be affected by the minimum level. ACC will base your ACC levy on your actual income.
- You can check your employment status on your ACC levy bill under the “Key information” on the first page. If the employment status on your ACC levy bill is incorrect, you need to contact ACC and they’ll re-calculate your ACC levy.
- ACC gets your industry code from your IR3 return (called “Classification Unit” on your ACC levy bill). If your industry code hasn’t been included in your IR3 return or if it was incorrect, your ACC levy bill might not be correct. If that’s the case, you should contact ACC and ask them to change your industry, and ACC will re-calculate your levy.
It’s always a good idea to check your ACC levy bill and see if ACC has got your employment status (part-time or full-time) and the industry code right. If it’s not the case, you should contact ACC and ask them to change your data and ACC will re-calculate your levy.
Bosspac reduces your tax bill for you
Reduce your tax bill
Once you receive your ACC levy bill, you can claim a proportion of your bill as an expense. At the end of the financial year, Bosspac gives you a new task where you just need to answer a few questions and Bosspac will do the heavy lifting for you. That means you will have a smaller tax bill in the next financial year.
Your industry code
Once people start their self-employment, they rarely know that the ACC levy bill will come. Bosspac gives you a heads up by estimating your ACC levies and letting you choose your industry straight from the Bosspac platform. Bosspac even takes into account your industry during the calculations and puts it on the pre-populated IR3 return.
Have you received your ACC levy bill?
ACC usually tries to reach you by the postal address that was provided in your IR3 return. If you have changed your address, please get in touch with ACC and update your address so that the ACC levy bill can reach you.
- How to pay ACC levies: https://www.acc.co.nz/for-business/paying-levies/ways-to-pay-levies/
The information provided here is of a general nature. It is not intended to be a substitute for professional advice.