Income for your employee while they recover

How employee payments work

We’ve created a guide which outlines how our weekly compensation works and what you need to do.

Employer’s guide to weekly compensation

Find out more about how weekly compensation works for your employee.

Getting paid if you can't work

Paying employees for the first week after injury

In the first week following injury, the employee can get income in different ways:

• if their injury happened at work, as their employer you’ll need to pay 80% of their regular income for the first calendar week. See how to calculate this in the employer's guide above
• if their injury happened outside of work, they may ask to use sick or annual leave to cover this time off.

After the first week of their injury

Your employee can request weekly compensation assistance. We’ll pay up to 80% of their income as weekly compensation if they can’t work or perform all their usual work activities.

Your employee may ask to use their annual or sick leave entitlements to top up their weekly compensation to 100% of their pre-injury income.

Topping up your employee’s income

We cover up to 80% of your employee’s income. Your employee can request to use their sick or annual leave entitlements to ‘top up’ their pay to bring earnings from 80% up to 100% of usual income, with no effect on their compensation from us.   

Alternatively, some employers may choose to pay a 20% top-up from payroll, not the employee’s leave entitlements.

Top-ups will be taxed as a secondary source of income. If your employee receives income from both you and us, encourage them to check their tax code with Inland Revenue.

If your employee is back at work but working reduced hours

If an employee is at work while they’re recovering, they may do different tasks or hours compared to their usual role. 

Your injured employee can receive income from both you and us at the same time, which could mean they get up to 100% of their usual weekly earnings. This is called abatement.

As their employer, you pay them for the hours they work. We then reduce (abates) the weekly compensation payment amount being paid to your employee based on the income they receive from you.

Your employee will need to confirm with us any form of income they’ve received from you each week. 

Managing employee payments as part of a gradual return to work plan quick guide

There are some simple steps you can take to help an injured employee to recover at work. This benefits them and your business.

Find out how you can work with your employee, their health professional and us to make a recovery at work plan.

Understanding roles in recovery at work

What does my employee need to do?

Your employee will need to let us know if they're paid any taxable income, including for a public holiday, while they're getting weekly compensation so we can ensure that their payment is correct.

They can notify us via MyACC. If they haven't registered, they can call us or register for MyACC.

Phone 0800 101 996 (Monday to Friday, 8am - 6pm)

Learn about MyACC

Public holiday payments

You generally won’t have to pay an employee for a public holiday while they’re receiving weekly compensation, but there are some exceptions. Visit the Employment New Zealand website to find out what your obligations are.

MBIE When a public holiday falls within a leave period

Employment details we need

When your employee applies for weekly compensation, we’ll ask them for information about their employment. We can access your employee’s earnings details directly from Inland Revenue to help us make decisions on their weekly compensation application. We will contact you directly if we require more information.

It’s then your employee’s responsibility to keep you updated on their situation, including when their weekly compensation payments start and finish, and the amount they’re receiving. If you can’t get the information you need from talking with your employee, you can contact us.

When we'll stop making payments

We’ll stop weekly compensation from the date your employee is ready to get back to their usual duties. This happens from the date their existing medical certificate expires, or their doctor issues a new certificate stating they’re fully fit, whichever comes first.

You’ll need to start paying them their full income again, and your employee will need to let you know when their last weekly compensation payment will be made.

For employers with a payroll team

If you have payroll staff please make sure they’re informed about the injury and how many hours the employee is working, and for what periods, so the employee is paid correctly.

Employers with complex payrolls may be suitable for the Employer Reimbursement Agreement (ERA). With ERA you can keep paying your injured employee without interruption.

How ERA works

ERA is a legal contract with us. Under ERA you’ll pay the 80% weekly compensation to your staff on our behalf for both work and non-work claims.

Your employee’s claim will be made with us as usual. If they need time off work, we can contact you to check if you’d like to use ERA for that claim or you can advise us to use ERA by default on all of your employees’ claims. 

If you choose to use ERA, we’ll calculate how much you need to pay and for what period. You’ll receive payments for any claims fortnightly, monthly, or 4-weekly on your chosen payday.

How to join ERA – talk to us first

Email our business team. We can help you decide if ERA suits your business.

Email bep@acc.co.nz

After you've talked to us, we'll send you the agreement to complete. You’ll need to include a bank deposit slip so that we can pay reimbursements into your account.

We’ll send you a confirmation email when we’ve processed your agreement.

Ending the ERA agreement

You can contact us to end the agreement at any time.