ACC - Paying Your Employee After an Accident

Updated: June 2026

Communication with ACC is key while your employee is receiving ACC weekly compensation payments. ACC should be advised if you provide any additional income payment as this may affect the employee's weekly compensation.

In this article:

• Payroll during ACC Week 1
• Voluntary Top-Ups
• Payroll during ACC Week 2 Onwards Till Employee's Return
• Resources and Further Information

Payroll during ACC Week 1 - For workplace accidents

ACC sends you a notice if an injury is covered by them and will include the percentage of wages or salary to be paid by the employer. Usually, the first calendar week of ACC is employer-paid for workplace injuries and comes to 80% of the employee's standard pay.

*Topping up the employee's salary to 100% is by choice and agreement. Follow this information if you want to top up the employee's pay within the first week of ACC.

If the employee was injured outside of work, they can use their sick leave, annual leave or Family Violence Leave (if applicable) for the first week of recovery.

Let's look at adding 'ACC wk1' to a timesheet:

1. Add a new row to the timesheet by clicking the green +sign on the right.
2. Select the payment type: 'ACC wk1' from the dropdown menu on the left of this row.
3. Fill in the hours for each ACC entry in that row.
   1. These hours must correspond to the employee's regular hours as set as the 'Default entries' of their Employee Profile.
4. Adjust or delete the 'Standard Pay' row entries as required. 
5. Update and Save this timesheet. The timesheet boxes will turn green when the timesheet has been saved.
6. Check the 'Gross balance' for the pay period to ensure that this is correct.
7. You can left-click in the timesheet entry to view its Costing Screen. 
   Here is an example of 'ACC wk1' automatically calculating 80% of regular pay:
   1. The value of the 'Standard Pay' entry of 4 hours is $120.00 (100%)
      
   2. The value of the 'ACC wk1' entry of 4 hours is $96.00 (80%)
      

What if I've already paid Sick Leave (or another leave type) before receiving the ACC approval notice?

Often the employer is notified after the fact that the employee has been approved for ACC. Chances are the employee has been on sick leave or receiving standard pay while awaiting their approval. Here's how to update this in our system:

• If the timesheet is still unprocessed on the Dashboard, you can update the timesheet to 'ACC wk1' and 'Save'.
• If the pay has already been processed, you have to do a correction pay to correct the sick leave and payment. Follow the guidelines in this article to see what this entails.

Voluntary Top-ups

By agreement, you may agree to top up your employee's pay to 100% while they are on ACC.  This topup does not affect the ACC compensation the employee receives.

Top-ups can be done in several ways. Discuss the options with your employee and agree on the way that best suits you:

Funded be you and not from the employees Sick or Annual leave balances

• • To top-up 20% during ACC week 1, you have to create a custom pay type for this top-up.
  • To top-up 20% from ACC week 2 onwards, use the preset pay type 'ACC wk2+' shown below.

Funded from the employees Sick or Annual leave balances

• Adding 1 day of Sick leave, Annual Leave or Family Violence Leave (if applicable) to the timesheet for every 5 days of ACC.

During ACC week 1: the timesheet could have ACC days and the leave entitlement you are using to top-up in the timesheet as shown. Remember that 1 leave entitlement top-up is entered for every 5 days of ACC. 

During ACC week 2 onwards: you may only have a single day of leave entitlement in the timesheet, as shown below.

Payroll during ACC Week 2 Onwards

If ACC is covering the employee's injury, they will pay up to 80% of the employee's average income from the second week of ACC until the employee returns to work. You are under no obligation to top up this employee's pay, which means that they could potentially not have a timesheet to process until their return to work.

20% Voluntary employer Top-up from ACC Week 2 onwards. Use the system pay type: 'ACC wk2+' for paying out voluntary top-ups from the second week of ACC until the employee returns to work. This pay type is programmed to pay out 20% of the employee's standard pay, so you don't have to make that calculation yourself.

Let's look at adding 'ACC wk2+' to a timesheet:

1. Add a new row to the timesheet by clicking the green +sign.
2. Select the payment type: 'ACC wk2+' from the dropdown menu on the left of this row.
3. Fill in the employees regular hours for each ACC entry in that row.
4. Update and Save this timesheet. The timesheet boxes will be green when the timesheet has been saved.
5. Check the 'Gross balance' for the pay period to ensure that this is correct.
6. You can left-click in the timesheet entry to view its Costing Screen.
   1. ACC wk2+ automatically calculates 20% of regular pay as shown in the costing screen: The value of the 'ACC wk2+' entry of 8 hours for Wednesday is $48.00 (20% of regular pay).

Resources and Further Information

What about a Public Holiday within the ACC-recovery time? If the public holiday falls on an OWD within the first calendar week of employer-paid ACC, the employee receives their paid public holiday off, at 100% of their pay rate for the day. If the public holiday falls during the second week of ACC onwards and before the employee returns to work, the employee does not receive pay for the public holiday.

For more information, follow this link to the Employment New Zealand website.

What if my employee returns for reduced hours while recovering?

To assist your employee in returning to work, they can receive income from both ACC and the employer.

• In the system, you only pay them for the hours they work at their regular rate. Use the 'Standard pay' pay type and adjust the timesheet hours to match.
• Your employee must confirm with ACC that they've received this income from you and ACC will adjust their compensation accordingly.
• Get your employee to check their tax code with the IRD, as this could be taxed as a secondary income.

When does ACC stop their compensation?

ACC will stop weekly compensation on the expiration date of the medical certificate, or as soon as a new certificate states the employee is fit to return to work.                          ACC compensation will also end if the employee returns to work fully before this date.

Useful links to more information:

The ACC website provides excellent information on coverage and assisting your employee to return to work after an injury. Here are some useful links to get you started:

• What to do when an employee is injured
• How does an employee's income on ACC work?
• Supportig your injured employee to recover at work

So that is the basics for managing payroll for an employee on ACC.