Overview
Processing leave for an employee on an ACC claim is a complex payroll task. It involves specific rules around pay rates, taxation, and leave accruals that differ from standard payroll processing.
To ensure your employee is paid correctly and your business remains compliant, all ACC-related pay adjustments must be handled by the Tempus Support team.
⚠️ Important: Please do not enter any ACC-related hours, first-week compensation, or top-up payments into an employee's timesheet. For any ACC-related matter, your first step should always be to contact Tempus Support via support@payrollbytempus.com
How to Handle ACC Leave
When an employee is injured, the correct action depends on whether the injury was work-related and how long they are unable to work.
The table below provides a summary of what you need to do in each scenario.
| Scenario | Your Action in Tempus Payroll | Who Pays the Employee? |
|---|---|---|
| Week 1 (Work-Related Injury) | Contact Tempus Support immediately. Provide the medical certificate. Leave the timesheet blank. | We process the required 80% "first week compensation" payment on your behalf. |
| Week 1 (Non-Work Injury) | Process sick or annual leave in the timesheet as you normally would. If the absence extends past one week, contact us. | You pay the employee 100% of their earnings, funded from their leave balances. |
| Week 2 Onwards (All Injuries) | Submit as leave in timesheet "Leave without pay - (excluding annual holidays)". Be sure to use the "excluding annual holidays" leave category. | ACC pays the employee "weekly compensation" directly. |
Optional 20% Top-Up Payments
While an employee receives 80% of their earnings from ACC, they may ask to "top up" their pay to 100%. This is typically funded by using their sick leave for the remainder 20% of earnings, whilst they are receiving 80% from ACC.
This arrangement is optional and must be explicitly agreed upon with your employee. You cannot use an employee's leave balance to fund a top-up without their consent.
What to do:
Discuss the top-up option with your employee and get their agreement in writing.
Contact Tempus Support with the details of the agreement.
We will set up and process the recurring top-up payment correctly. Please do not add this to the timesheet yourself.
⚠️ Note on Tax: Top-up payments are typically considered a secondary source of income by the IRD and are typically taxed with a secondary tax code. If this is not done correctly, your employee may face a large tax bill at the end of the year. For the Tempus Team to update an individual tax code, we must receive an updated and signed IR330.
Key Takeaways
For any ACC related injury, contact Tempus Support immediately.
Never enter ACC-related payments directly into a timesheet. This includes first-week compensation and 20% top-ups.
For any period where ACC is paying the employee directly (from week two onwards), submit as leave in timesheet "Leave without pay - (excluding annual holidays)". Be sure to use the "excluding annual holidays" leave category.
All 20% top-up arrangements require an employee's agreement and must be set up and processed by Tempus Support.