The first in a series of articles covering what ACC is all about and the services it provides to both Employers and Employees.
One of the biggest mis-conceptions is around the payments we pay as employees. Currently all wage earning employees pay 1.7% of their Gross Pay to ACC. This is called the Earner Premium and it is used by ACC to cover all non-work related accidents, of which there are many, with your home been the scene of the largest number of injuries. The other big area is sport.
The Earner Premium is calculated with, and part of, your tax. So when you select your tax code it includes the component for ACC, which is my view is a shame as I think most people the see it as a Tax whereas it’s a Insurance Premium, much like you pay for contents or car insurance.
It would be great if the Payroll Software developers out there split off the Earner Premium from Tax Calculations and showed it as an itimised deduction on your payslips so that you can see exactly how much you are paying towards Injury Insurance.
The last thing to note about the Earner Premium is that it is capped each year at a certain income level. The level for the current 09/10 tax year is $106,473, which equates to $1,810.04 of Earner Premium per year, GST inclusive.
