Understanding the Experience Rating programme
Experience Rating impacts a business' Work levy. It means their invoice can receive a discount, loading, or remain the same depending on their health and safety performance.
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The Work levy
All businesses in Aotearoa New Zealand pay a Work levy which goes into our Work Account. This helps us fund care and support for those injured in work-related accidents, or those which happen in the workplace.
The levy ensures businesses and their most important asset – its people – can have peace of mind that they're protected should an injury occur.
It means that if you or an employee has an accident, we help pay for their care and support their recovery. This might include treatment and rehabilitation, support to recover at work and, in some cases, weekly compensation.
How much a business pays is unique to them and can vary from year to year. We calculate it based on a number of factors:
- the risk of injury at work
- a business' claims history
- liable income or payroll.
Understanding levies if you work or own a business
How the Experience Rating programme fits in
Everyone deserves to come home safe from work every day and encouraging businesses to strengthen their focus on health and safety is an important way to do that. A safe workplace not only means a business can remain productive and protect its employees, but also leads to fewer ACC claims and staff days off.
Experience Rating impacts your business' Work levy and aims to make what you pay fairer by reflecting your health and safety performance.
If your business has paid a Work levy for at least three years, you may come under the Experience Rating programme depending on the levies you've paid over that time.
There are two categories under the Experience Rating programme:
- No Claims Discount - the Work levy is less than $10,000 in any one of the three years.
- Experience Rating - the Work levy is more than $10,000 for three years in a row.
Your business will not be part of the Experience Rating if your payroll or income was below the minimum for each of the three years or your business wasn't operating.
Check the minimum payroll and income levels
Experience Rating resources
Experience rating for your business
Experience rating for business groups
Experience rating for intermediaries
Impact of fatal claims
From 1 April 2023, we're including an additional adjustment to Experience Rating to reflect the significance of fatal claims.
This only affects businesses, or business groups, whose Work levy is more than $10,000 for three years in a row.
If an Experience Rating workplace experiences one or more fatal claims within the most recent year in the Experience Period, a 20% increase will be added on top of their discount or loading.
This will be a 10% loading the following year if there are no further fatal claims.
If there are fatal claims in the two most recent Experience Period years, a maximum 20% increase is added.
In the third year following a fatal claim, this will be calculated as an ACC claim with medical and treatment expenses over $500.
Before your business is added to a programme
Businesses are automatically covered under our standard Workplace Cover once they take on staff and become an employer. This is paid through the Work levy.
If, after three years, your business meets the requirements for either the No Claims Discount or the Experience Rating programme, the relevant adjustments will be included in the Work Account portion of your levy invoice.
If your business doesn't come under either programme, your levy invoice will not include the No Claims Discount or Experience Rating programme adjustment.
Understanding your cover options
Experience Rating programmes
To be part of our No Claims Discount Programme, we look at your annual Work levy over a three-year period.
You'll be eligible if you:
- earned above the full-time minimum liable income for each of those years, and
- paid less than $10,000 in any one of those three years.
Check the minimum payroll and income levels
No Claims Discount
Your claims history for work-related injuries over the three-year period will determine whether:
- you get a discount
- you get a loading
- your Work levy will stay the same.
How you'll get a discount
You'll get a 10% discount on your Work levy if over the three-year period your business has had:
- no weekly compensation days, and
- no fatal claims.
No changes to your Work levy
Your Work levy will stay the same if over the three-year period your business has had:
- between 1 to 70 weekly compensation days, and
- no fatal claims.
How you'll get a loading
You'll get a 10% loading on your Work levy if over the three-year period your business has had:
- more than 70 weekly compensation days, or
- any fatal claims.
Your business is part of Experience Rating if you, or your business group, has paid a Work levy of $10,000 or more a year, for three years in a row.
What is a business group
When businesses share common ownership, we group them together. We determine if you're in a business group by looking at the shareholdings. Each member will pay an ACC Work levy based on their individual liable earnings, but the Experience Rating modifier will apply across the whole group.
Experience Rating is part of the ACC Work levy
There are a few steps to calculate your ACC Work levy and, for some, Experience Rating is one of them.
On the Work levy invoice, you’ll see a Work Account levy amount. This is a base calculation that considers the industry you operate in and the total liable earnings of all your employees.
Getting a discount or a loading
Through the Experience Rating Programme, you could get up to 50% ‘discount’ off your Work levy, or up to 100% ‘loading’. To work that out, we look at your claims history for work-related injuries and fatal claims over the Experience Period.
This Experience Rating adjustment is then applied to your Work levy.
How we calculate and apply Experience Rating
By comparing this against your industry, we calculate if you’ll get a discount or a loading, and by how much. We consider:
- the number of weekly compensation days your employees have
- the number of claims for your employees with medical and treatment costs of over $500
- any fatal claims.
Older claims have less of an influence on your discount or loading, so your more recent history becomes more important.
Over the three years, claims in:
- year 1 (most recent year) receive a 100% weighting
- year 2 receive a 70% weighting
- year 3 receive a 40% weighting.
This provides an opportunity for businesses to reduce their Work levy by preventing injuries and helping employees return to work sooner.
We publish quarterly claims reports on our online platform MyACC for Business to help you keep track of your how you're doing.
Members of a business group will receive the same Experience Rating adjustment which reflects its overall performance. Where a group has members involved in multiple industries, the final adjustment reflects the group’s size and performance in those industries.
Supporting recovery at work to lower your Work levy
There are two key ways a business can reduce its Work levy – by preventing injuries in the workplace and supporting injured employees to recover at work.
As an employer, playing an early and active part in an injured employee's recovery also has other benefits. Creating a plan to get them back into the workplace sooner can mean:
- holding on to vital skills and knowledge
- saving on recruiting and training new staff
- reducing the cost of lost productivity.
We've created plenty of resources to help employers and employees get on track with recovery at work and improving workplace safety.
Supporting your injured employee to recover at work
My ACC for Business
Our online platform MyACC for Business takes the guesswork out of doing business with us. When you sign up, you can easily update your details, check what you owe and see claim reports whenever it suits you.
With MyACC for Business you can:
- use live chat to talk to a customer service representative
- view and download your employer claims reports
- view, pay or download your levy invoices
- view your injured employee's work-related claims information online and in real time.
This includes your employee's work capacity information and any work restrictions they might have. You can use this information to help support your employee's safe recovery at work.
Log in or register for MyACC for Business
Contact us
If you want to know more about the Experience Rating programme and how it affects your Work levy, contact your relationship manager, or get in touch with the Business Incentives team.
Email er@acc.co.nz