Paying ACC First Week (New Zealand)
ACC is a scheme that is administered by the Accident Compensation Corporation to cover personal injury on a no-fault basis. It can provide contributions towards costs such as loss of earnings, home or vehicle modification or treatment of injury.
When an employee is injured and needs to miss work due to the injury, ACC has a scheme in place to compensate the employee for loss of earnings. This takes effect on the 2nd week of the employees injury break, requiring the employer to pay the employee for the first week of the injury break at 80% of the employee's earnings.
Processing of the first week of ACC for an employee following a work related injury is done using as allowance that is setup as detailed below:
- Pay Rate Setup
- Go to the Utilities menu then click on Setup Exo Payroll then click on the Setup Page 2 tab.
- Select the first spare Pay Rate Type, often showing as Undefined and call it ACC First Week then enter a Rate of 0.80.
- Press F10 to save these settings.
- Go to the Maintenance menu then click on Allowances.
- Check the list of Allowances to see if an ACC First Week allowance already exists. If there is an ACC First Week allowance then edit the allowance to make sure the settings are correct.
- If there is no existing ACC First Week allowance then click on Add:F4 to create the allowance.
- Use the default Code that appears or enter an allowance code as desired then enter the name of the allowance such as ACC First Week in the Name field.
- Set the Allowance to Taxable with a Calculation Method of Hourly Rate, a Pay Rate Type of ACC First Week and a Type of Normal.
Under the Options heading at the bottom of the page tick the fields for Add to Gross for Holiday Pay, Add to Gross for Relevant Daily Rate, Add to Gross for Kiwisaver and Not Liable for ACC. The Add to Gross for Super option can be ticked if the company has a Superannuation scheme for the employees. If the company is allowing Payroll Giving then the Eligible for PG option can be ticked.
The Not Liable for ACC option does not affect the information supplied to ACC from the IRD. This setting only affects the figures that appear on the ACC Employer Premium report that can be printed from the IRD tab of the Print Report screen.- Once everything has been setup then click Save:F10.
Processing ACC First Week allowance
When paying an employee for time taken off work for an ACC-related injury, use the ACC First Week allowance that has been created using the steps above in the normal pay cycle, ensuring that the employee's regular wages figures have been adjusted to reflect the ACC First Week earnings.
Reporting on the ACC First Week allowance
When reporting on any figures paid using the ACC First Week allowance, the Allowance History report allows reporting on that specific allowance by entering the code of the allowance in the Allowance field of the Selection Ranges section.
Non-work-related injuries
When paying an employee for the 1st week following a non work related injury, this can be processed as Sick Leave where the employment contract allows or from annual leave if agreed by the employee.
Need more help? You can open the online help by pressing F1 on your keyboard while in your software.
You can also find more help resources on the MYOB Exo Employer Services Education Centre for Australia or New Zealand.