How does ACC leave work?

ACC Leave (definition)

Accident Compensation Corporation (ACC) provides cover for work or non-work related injury to anyone in New Zealand. Processing ACC Leave in payroll is all too common for Kiwi businesses. 

No matter what payroll system you use, there are some general rules to follow with the scheme: 

  • When the employee is taking leave for the first week of a non-work related accident, sick leave may be used.

  • If an employee has a work-related accident, the employer has to pay “first week compensation” and cannot require the employee to take that time off as sick leave.

  • If an employee is receiving “first week compensation” for a work-related accident, an employer and employee can agree that the employer will top up the “first week compensation” payment from 80% to 100% by reducing the employee’s sick leave entitlement by one day for each five days’ leave taken.

  • If an employee has a work-related or non-work-related accident and remains on weekly compensation, the employer cannot require the employee to take time off as sick leave.

  • If an employee is receiving weekly compensation from ACC, the employer has no obligation to pay the employee.

  • Where the period of leave on ACC is in excess of five days (for either workplace or non-work accidents), the employer and employee can agree that the employer will top up the ACC payment from 80% to 100% by reducing the employee’s sick leave entitlement by one day for each five days’ leave taken.

PayHero manages ACC payments through leave requests and pay items.


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