New shareholder-employees

New shareholder-employee

ACC provides injury cover when your new business employs you. Your levy payments are calculated from the information in your tax return. If you are injured you can claim for help with treatment costs, medical expenses and loss of earnings.

On this page

  1. Shareholder-employee – employed by your own company
  2. What you need to do when you get started
  3. Shareholder-employee cover options
  4. What do I have to pay?
  5. How do I make a claim?
  6. How much lost earnings compensation am I covered for?
  7. Relevant legislation

Shareholder-employee – employed by your own company

As a shareholder-employee, you will own shares in a company that employs you.

Typically as a shareholder-employee:

  • you will own shares in a company you set up (and may be a director of)
  • you will provide goods or services through your company
  • your company will invoice and be paid for the goods or services you provide
  • you will then be paid by the company.

For ACC purposes, there are two types of shareholder-employee:

  • PAYE shareholder-employee: those who receive a regular salary/wage from the company that is subject to PAYE deductions, or
  • Non-PAYE shareholder-employee: those who receive earnings that are not subject to PAYE deductions.

Like self-employed people, you are primarily responsible for your own employment. But because you work through a company, you are also like a small business.

If you do not own shares in a company, but work as a sole trader, in a partnership, as a sharemilker, or receive withholding or schedular payments, then you are considered self-employed.

What you need to do when you get started

In your first year as a shareholder-employee, you will need to do the following:

  1. Begin employment with your company and determine if you will be paid with or without PAYE tax deducted:
  • You will automatically be covered by ACC WorkPlace Cover regardless.
  • If you do not have PAYE deducted you can consider applying for ACC CoverPlus Extra. This option allows you to negotiate an agreed amount of lost earnings compensation that may be more appropriate to your needs.
  1. File your company and personal tax returns with Inland Revenue.
  • Inland Revenue processes your tax returns and sends earnings details and your business industry code to ACC
  • ACC calculates your levy for the first year or part year of business based on your income and business industry code (from July)
  • ACC also calculates the levy for the year ahead based on the same income and business industry code (from July).
  1. Pay your ACC levies. Your ACC levy invoice arrives a few months after your tax return is submitted. Pay within two months to avoid overdue penalties.

For more information, see:

New Zealand Companies House (external link)

Inland Revenue (external link)

Shareholder-employee cover options

You are covered by ACC when you start employment with your company, even though the business hasn’t paid for it yet. You get the benefits of cover automatically and do not need to apply. This covers you for medical treatment, rehabilitation and compensation for loss of earnings.

There are three cover options that are available to shareholder-employees:

ACC WorkPlace Cover: standard cover that automatically applies when you start the business

ACC CoverPlus Extra: cover that gives you an agreed level of lost earnings compensation

ACC TimeOut: extending your cover while you take a break from work.

What do I have to pay?

Payments to ACC for personal injury cover are called levies. The levy rate for businesses is based on:

  • the industry it is in
  • its liable earnings (from your last tax return)
  • the claims in that industry in the past and what we think it will have in the future.

Although you are covered immediately, ACC does not charge you straight away. You receive an invoice for cover after your tax returns are submitted. ACC uses details from Inland Revenue to calculate your levies. When you receive your ACC invoice pack you will receive two invoices. One invoice for the past year, and one invoice for the coming year.

ACC’s levy calculators help you estimate what your levy invoice might be.

Levies for shareholder-employees

Calculate your next levy invoice

How do I pay?

Your invoice pack: Shareholder-employee

How do I make a claim?

The medical practitioner who treats you will submit your ACC claim. Delaying treatment delays your claim being submitted, and may make your injury worse. The sooner we receive your claim the quicker we can help you.

ACC may be able to help with your injury costs, travel and medical bills, expenses and lost earnings while you recover. After your claim is accepted, we work with you to determine what support you need.

Shareholder-employee: What happens if I get injured?

How much lost earnings compensation am I covered for?

If you need time off work to recover from an injury, lost earnings compensation can help with your loss of income. The type of cover you have, the hours you work, and your income determine what your lost earnings compensation will be. As a shareholder-employee, your company is required to pay your first week of lost earnings compensation, after which time, ACC may take over payments.

If you are a non-PAYE shareholder-employee who has chosen ACC CoverPlus Extra you will be paid your agreed amount of lost earnings compensation.

Relevant legislation

Accident Compensation (AC) Act 2001: Part 6 Management of the scheme (external link)

Last updated: 15 December 2008