ACC levies for hairdressers: what a New Zealand hair salon pays

The first ACC invoice confuses almost every new salon owner. It arrives months after you started trading, it lists levies you never signed up for, and it quotes a classification code nobody remembers choosing. Then a second invoice arrives, because the business and the self-employed owner are levied separately. None of it is a mistake: it is how New Zealand's accident cover works, and once you can read the invoice, it is one of the more predictable lines in a salon's budget.

This guide explains what ACC levies are, exactly what the hairdressing classification costs in the current levy year, who pays what depending on whether you employ stylists, rent out chairs or work for yourself, and the one genuine decision a self-employed stylist gets to make: CoverPlus or CoverPlus Extra.

Every figure below was checked on acc.co.nz or ird.govt.nz in October 2026, and rates change each levy year, so treat this as orientation rather than tax advice: your accountant has the final word on your numbers. And because levies are a percentage of earnings you cannot negotiate, the lever you do control is how full your chairs are; a free online appointment book for your hair salon with 0% commission works on that side of the equation without adding another fixed cost.

Why there is no workers comp insurance to buy

Owners arriving from overseas guides look for "workers compensation insurance" and cannot find it, because New Zealand abolished the right to sue for personal injury and replaced it with ACC, a universal no-fault scheme. If your stylist slips on a wet floor, cuts a finger with shears or is injured mountain biking on Sunday, ACC covers the treatment and part of the lost income, whoever was at fault. There is no policy to shop for and no opting out: businesses and earners fund the scheme through levies that ACC invoices based on your activity and earnings (ACC, understanding levies, checked in October 2026).

That is why a salon's insurance conversation looks different here than in most countries, something we flagged in our guide to opening a hair salon in New Zealand. You do not buy injury cover; you budget for the levy invoices and buy insurance for everything ACC does not touch, which we come back to at the end.

The three levies on a salon's invoice

ACC splits its funding into separate levies, and a salon meets three of them:

The Work levy is the only one priced by your industry. Every business is assigned a classification unit (CU) based on its activity, grouped into risk bands, so scaffolders subsidise neither florists nor hairdressers. The Working Safer levy is a flat NZ$0.08 per NZ$100 for everyone, collected on behalf of WorkSafe. The earners' levy covers non-work injuries and follows the person, not the business: for your employees it is already inside their PAYE deductions, so it costs you nothing as an employer, while a self-employed owner pays it through the ACC invoice.

What the hairdressing classification costs in 2026/27

Hairdressing sits in classification unit 95260, "Hairdressing and beauty services", levy risk group 953. For the levy year running 1 April 2026 to 31 March 2027, the Work levy for CU 95260 is NZ$0.50 per NZ$100 of liable earnings, excluding GST, per the ACC Levy Guidebook 2026/27 (checked in October 2026). In the 2025/26 year it was NZ$0.51, per the 2025/26 guidebook, so the rate actually edged down.

Half a percent of payroll is one of the lower rates in the levy table: standing at a chair with scissors is, statistically, a gentle way to earn a living compared with most trades in that document. For context, even nursery production is levied at NZ$0.88 per NZ$100 in the same table. So while the invoice is annoying, the hairdressing rate itself is not the part of your cost base to lose sleep over; wages, rent and empty chairs matter far more, as the worked numbers in our guide to hairdresser wages and on-costs in New Zealand show.

The earners' levy is the bigger line for an individual. For the tax year ending 31 March 2027 it is 1.75% of liable earnings, capped at NZ$156,641 of income (maximum levy NZ$2,741.22), rising to 1.83% on income up to NZ$160,244 the following year, per Inland Revenue's earners' levy rates (checked in October 2026). In the year ended 31 March 2026 it was 1.67%, so the trajectory is upward: budget the trend, not just this year's rate.

Employer, self-employed or chair renter: who pays what

If you employ stylists

As an employer you pay the Work levy and the Working Safer levy on your liable payroll: at 2026/27 rates, NZ$0.58 per NZ$100 of wages in total, plus GST. Your employees' earners' levy is deducted from their pay through PAYE along with their income tax, so it never appears on your ACC invoice. ACC calculates your invoice from the payroll information you have already filed with Inland Revenue through your employer returns; there is no separate declaration to make (ACC, calculating your levies, checked in October 2026). Levies are one of the on-costs that sit on top of the hourly rate, alongside leave and the employer KiwiSaver contribution, which has its own moving parts covered in our guide to KiwiSaver in salon payroll.

If you are self-employed

A sole trader owner, a solo stylist working from home and a chair renter are all in the same position: you pay all three levies yourself, invoiced by ACC after your IR3 tax return tells them what you earned. On the default cover, the invoice therefore arrives in arrears, calculated on last year's actual earnings.

Two thresholds matter in 2026/27, per the same ACC levy calculation page:

• Maximum liable income: NZ$156,641. Earnings above that are not levied.
• Minimum liable income: NZ$50,501, but only if you work full time. If you average more than 30 hours a week in the business, ACC levies you on at least the minimum even when your actual profit was lower. A full-time first year that nets NZ$35,000 is still levied as if you earned NZ$50,501. Part-timers at 30 hours or less are levied on actual earnings with no minimum.

That minimum catches new full-time salon owners off guard more than any other rule on the invoice, so put it in the year-one budget deliberately, a point that applies equally to a home-based hair salon.

Chair renters pay their own

A genuine rent-a-chair stylist is a business, not an employee, so she receives her own ACC invoice for all three levies on her own earnings, and the salon owner's payroll levies do not cover her. If a "renter" is in substance an employee, the levies, like holiday pay, land back on the salon, which is one more reason the arrangement has to be genuinely independent; the full picture is in our guide to chair rental in New Zealand hair salons.

CoverPlus or CoverPlus Extra: the one real choice

The default product for the self-employed is ACC CoverPlus: if an injury stops you working, weekly compensation is based on up to 80% of your previous year's liable earnings. That works well for a stylist with a steady earnings history. It works badly in two common salon situations: a brand-new business with no earnings history yet, and income that swings from year to year.

CoverPlus Extra (CPX) is the optional alternative: you apply to agree a level of cover in advance, and if a claim is accepted ACC pays 100% of that agreed amount, without adjusting it if the business keeps generating some income or you manage a partial return to work (ACC, CoverPlus Extra, checked in October 2026). You know exactly what you would receive and exactly what you will be invoiced. The certainty is priced in: for CU 95260 in 2026/27, the CPX levy is NZ$0.71 per NZ$100 of agreed cover (or NZ$0.65 on the lower weekly compensation option) against NZ$0.50 on standard cover, per the levy guidebook above. Cover must be in place before the accident, so this is a decision for a quiet Tuesday, not for the week after a wrist injury.

For a solo stylist whose hands are the entire revenue of the business, this choice deserves ten minutes with an accountant or adviser once a year. It is the difference between compensation based on whatever last year's IR3 happened to say and a number you chose on purpose.

A worked example: one salon, two invoices

A deliberately hypothetical salon, to show the shape of the numbers rather than predict yours. The owner is a full-time sole trader drawing the business profit; two employed stylists earn NZ$120,000 of gross wages between them; the owner's own liable income is NZ$85,000. At 2026/27 rates:

• Employer invoice: Work levy NZ$600 (0.50% of NZ$120,000) plus Working Safer levy NZ$96 (0.08%), about NZ$696 plus GST for the year. The stylists' earners' levy comes out of their own PAYE.
• Owner's self-employed invoice: Work levy NZ$425 plus Working Safer levy NZ$68, both plus GST, plus the earners' levy of roughly NZ$1,487 (1.75% GST inclusive of NZ$85,000). Call it around NZ$2,000 for the year.

Two invoices, a little over NZ$2,700 in total, on a business turning over several hundred thousand dollars: real money, but predictable money. The practical advice is unglamorous: keep your BIC code accurate so you are actually in CU 95260, file your IR returns on time because the invoice is built from them, and set the levy money aside monthly so the annual invoice is boring.

What ACC does not cover, honestly

ACC covers injuries. It does not cover illness (a stylist off for months with pneumonia has no ACC claim), it does not rebuild your salon after a fire, it does not cover the client whose scalp reacts to a colour service and seeks compensation beyond treatment, and it does not replace lost profit while the shop is closed. Treating the levy invoice as "insurance sorted" is the most expensive misreading of the scheme a salon owner can make.

So the levies and a commercial insurance programme are complements, not substitutes: public liability, contents, business interruption and the rest still need arranging separately, and we cover what a salon actually needs in our guide to hair salon insurance in New Zealand.

One last cost note, since this is a money article. ViteUneCoupe's free plan gives a salon unlimited online bookings with 0% commission, a booking page, service catalogue, staff schedules and a client database; the Standard plan, from 29 € excluding tax per month with no commitment, adds confirmation, reminder and thank-you emails plus calendar sync. It is billed in euros, so the New Zealand dollar amount on your statement moves with the exchange rate and your bank may add a foreign-transaction fee, and reminders are email only, no SMS on any plan, where NZ-built competitors bundling SMS have a genuine advantage for text-first clients. Unlike your ACC levies, it is optional; like them, it is small next to the cost of an empty chair.

Frequently asked questions

How much ACC does a hairdresser pay in New Zealand?

For the 2026/27 levy year, hairdressing (classification unit 95260) pays a Work levy of NZ$0.50 per NZ$100 of liable earnings plus a Working Safer levy of NZ$0.08, both excluding GST. On top of that, every earner pays the earners' levy of 1.75% (GST inclusive) on income up to NZ$156,641: employees through PAYE, the self-employed through their ACC invoice. Rates are set per levy year on acc.co.nz.

Do salon employees cost the employer an earners' levy?

No. The earners' levy is deducted from the employee's own pay through PAYE. The employer pays only the Work levy and the Working Safer levy on liable payroll, which for hairdressing in 2026/27 is NZ$0.58 per NZ$100 of wages in total, plus GST.

I am a part-time self-employed stylist. Does the minimum liable income apply to me?

No. The minimum (NZ$50,501 in 2026/27) applies only if you work more than 30 hours a week on average in the business. At 30 hours or less, ACC levies your actual earnings with no minimum. Full-time self-employed stylists are levied on at least the minimum even in a low-profit year.

Should a self-employed hairdresser choose CoverPlus Extra?

CoverPlus Extra suits stylists with no earnings history yet or income that varies a lot, because you agree the compensation amount in advance and ACC pays 100% of it on an accepted claim, instead of up to 80% of last year's earnings under standard CoverPlus. It costs more per NZ$100 of cover and you must apply before any accident. It is worth an annual conversation with your accountant rather than a default either way.

Does paying ACC levies mean my salon does not need insurance?

No. ACC covers injuries only. Illness, fire, theft, business interruption and liability claims beyond injury treatment all sit outside the scheme, so a salon still needs its own commercial insurance alongside the levies.