ACC Earners' Levy NZ: The Rate, the Cap and What It Buys
The ACC earners' levy is $1.75 per $100 of liable earnings for the tax year 1 April 2026 to 31 March 2027, it is charged only on the first $156,641 you earn, and the maximum any one person pays this year is $2,741.22 (Inland Revenue, retrieved 19 August 2026). If you are on a salary of $80,000, your share is $1,400 for the year, and you will never see it on a line of its own.
That last part is why the levy is so poorly understood. It is not a separate deduction. It is folded inside PAYE, so most people who pay it every fortnight have never seen the number.
What the earners' levy actually pays for
New Zealand's accident scheme is funded through separate accounts, and the earners' levy funds one of them. ACC describes it plainly: the earners' levy "covers accidents outside the workplace" and is "charged at a flat rate for all levy payers" (ACC, retrieved 19 August 2026). On a self-employed invoice ACC puts it the same way, describing the earners' levy as the one that "covers the current and future cost of non-work-related injuries" (ACC, retrieved 19 August 2026).
So the earners' levy is the part of your pay that buys cover for the injury you get at home, on the field, on the ladder at the bach or on the ski slope. Injuries at work are funded by a different levy, the work levy, paid by your employer or by you if you are self-employed. Injuries involving a moving vehicle on a public road are funded by the motor vehicle levy at the pump and on your rego.
What that buys, if you are hurt and cannot work, is weekly compensation of up to 80% of your pre-injury earnings, plus help with treatment and rehabilitation. The gross maximum weekly compensation rate is $2,466.20 a week from 1 July 2026 (ACC Newsroom, 11 June 2026, retrieved 19 August 2026). That maximum annualises to $128,242.40, which is well below the earnings cap you pay levies on.
What the rate is, and where it has come from
The earners' levy rate is reset on 1 April each year. Inland Revenue publishes the full history, and the pattern since 2022 is a straight line upward.
Earners' levy rate per $100 of liable earnings, GST inclusive, by tax year, from Inland Revenue's published rate table (retrieved 19 August 2026). The 2027/28 rate is already legislated.
| Tax year | Rate per $100 (GST inclusive) | Maximum liable earnings | Maximum levy payable |
|---|---|---|---|
| 1 Apr 2021 to 31 Mar 2022 | $1.39 | $130,911 | $1,819.66 |
| 1 Apr 2022 to 31 Mar 2023 | $1.46 | $136,544 | $1,993.54 |
| 1 Apr 2023 to 31 Mar 2024 | $1.53 | $139,384 | $2,132.57 |
| 1 Apr 2024 to 31 Mar 2025 | $1.60 | $142,283 | $2,276.52 |
| 1 Apr 2025 to 31 Mar 2026 | $1.67 | $152,790 | $2,551.59 |
| 1 Apr 2026 to 31 Mar 2027 | $1.75 | $156,641 | $2,741.22 |
| 1 Apr 2027 to 31 Mar 2028 | $1.83 | $160,244 | $2,932.47 |
Read the two right-hand columns together. Across the five years from 2021/22 to 2026/27 the rate rose 26%, the cap rose 20%, and the maximum levy payable rose 51%. Two levers moved at once. For anyone at or above the cap, the compounding of those two moves is the whole story.
There is a second number you will see quoted, and it is not a mistake. ACC's own levy guidebook states the earners' levy as "$1.52 per $100 of your liable earnings" and adds the note "All levy rates are shown exclusive of GST" (ACC Levy Guidebook 2026/27, page 9, retrieved 19 August 2026). Inland Revenue publishes $1.75 and states that its amounts include GST. The two are the same levy quoted either side of GST, and $1.52 grossed up at the standard 15% rate gives $1.748, which is where Inland Revenue's $1.75 comes from. That gross-up is our arithmetic, not a published reconciliation.
What income the levy is charged on
Not every dollar Inland Revenue taxes is a dollar ACC levies. The employer's guide sets out two lists (Inland Revenue, IR335 Employer's guide, page 18, retrieved 19 August 2026).
Earners' levy is deducted from salary and wages, overtime, backpay and holiday pay, long-service leave pay, bonuses or gratuities, taxable allowances, shareholder-employee salaries that have PAYE deducted, salaries to partners in a partnership, and salaries to working owners of a look-through company.
Earners' levy is not deducted from schedular payments, retirement payments, redundancy payments, employee share scheme benefits, jury fees, witness fees, taxable and non-taxable pensions, tax-free allowances, or shareholder-employee salaries with no PAYE deducted. On that last one, ACC invoices the company separately for the earners' levy on non-PAYE shareholder-employee remuneration, based on what the company declared in its IR4.
The schedular payments line matters if you contract. Inland Revenue instructs employers not to deduct ACC earners' levy from schedular payments, because contractors are invoiced by ACC directly instead. If you are on withholding tax, the levy has not been taken, and a bill is coming.
For anyone self-employed, ACC treats a separate category of income as non-liable altogether. Its internal liable-earnings policy, released under the Official Information Act, lists rental income, interest and dividends, estate and trust income, beneficiary income, pensions, overseas pensions, retirement payments, redundancy payments, witness fees, silent partner income and income from a non-active owner of a look-through company as non-liable (ACC OIA response GOV-027418, 19 September 2023, retrieved 19 August 2026). Rent and dividends do not attract an earners' levy. Work does.
The cap makes this a flat levy that stops being flat
The levy is charged at 1.75% of every dollar you earn until you reach $156,641, and then it stops. There is no second bracket. Above the cap, the effective rate falls away.
Effective earners' levy as a percentage of total income, tax year ending 31 March 2027, calculated from the published rate of 1.75% and the published cap of $156,641 (Inland Revenue, retrieved 19 August 2026). The percentages are our arithmetic on those two published figures.
| Annual income | Earners' levy for the year | Effective rate on total income |
|---|---|---|
| $40,000 | $700.00 | 1.75% |
| $60,000 | $1,050.00 | 1.75% |
| $80,000 | $1,400.00 | 1.75% |
| $100,000 | $1,750.00 | 1.75% |
| $140,000 | $2,450.00 | 1.75% |
| $156,641 | $2,741.22 | 1.75% |
| $180,000 | $2,741.22 | 1.52% |
| $220,000 | $2,741.22 | 1.25% |
| $300,000 | $2,741.22 | 0.91% |
The cap is not an accident of design. Weekly compensation is itself capped, at $2,466.20 gross a week, so ACC stops levying at roughly the point it stops insuring. What it means in practice is that the earners' levy is a proportional charge for almost everyone and a shrinking one for high earners. It also means the further your income sits above the cap, the larger the slice of it ACC will never replace.
Where it shows up on your payslip
It usually does not. Inland Revenue's instruction to employers is unambiguous: "PAYE includes ACC earners' levy already, so no extra calculations are needed" (IR335, page 18, retrieved 19 August 2026). The levy is inside the single PAYE figure on your payslip, not beside it.
You can see the levy separated out in two places in Inland Revenue's own published material. The first is the extra-pay table, which prints two columns for the same income band.
| Income band | PAYE rate including earners' levy | PAYE rate excluding earners' levy |
|---|---|---|
| $0 to $15,600 | 12.25% | 10.50% |
| $15,601 to $53,500 | 19.25% | 17.50% |
| $53,501 to $78,100 | 31.75% | 30.00% |
| $78,101 to $156,641 | 34.75% | 33.00% |
| $156,642 to $180,000 | 33.00% | 33.00% |
| $180,001 upwards | 39.00% | 39.00% |
Extra-pay rates for the tax year ending 31 March 2027, from IR335 page 40 (retrieved 19 August 2026). The gap between the two columns is exactly 1.75 percentage points until income passes $156,641, where it closes to nothing.
The second is the per-pay-period cap. Inland Revenue publishes the maximum earnings the levy applies to at each pay frequency: $3,012 per weekly pay, $6,024 per fortnightly pay, $12,048 per four-weekly pay and $13,053 per monthly pay (IR335, page 18, retrieved 19 August 2026). If a single pay exceeds those, the levy stops within that pay.
What the levy does not buy
The earners' levy buys accident cover. It does not buy sickness cover. ACC does not cover illness, or conditions related to ageing, and it does not cover most gradual-onset conditions unless a specific work exposure test is met (ACC, retrieved 19 August 2026).
That is the gap the levy cannot close. A cancer diagnosis, a heart attack, a back that degenerates rather than tears, a mental health condition without a qualifying physical injury: none of these produce a weekly compensation payment, no matter how many years of earners' levy you have paid. We have set out what falls outside the scheme in what ACC does not cover and the size of the shortfall in the ACC gap explained.
The honest limits on the figures here
Everything above is reproduced from ACC or Inland Revenue, and each figure is scoped to the year beside it. Four limits are worth stating.
The rate applies to the tax year, not the calendar year, and it changes on 1 April. A figure quoted in March and a figure quoted in April are both correct and different.
The $1.52 and $1.75 numbers are the same levy either side of GST. Whether you deal with the exclusive or inclusive figure depends on whether you are levied through PAYE or invoiced by ACC, and if you are GST registered the GST on an ACC invoice is deductible.
The effective-rate percentages in the chart above are our arithmetic on two published inputs. ACC and Inland Revenue publish the rate and the cap; neither publishes the effective rate.
Finally, the earners' levy is only one of the three levies. If you are self-employed you also pay a work levy set by your classification unit, and that levy varies by a factor of more than 250 across industries. Those rates, and how the three fit together, are set out in ACC levy rates for the current levy year and worked through step by step in how to calculate your ACC levy.
Working out what the gap costs you
Your earners' levy is fixed. What is not fixed is what happens to your income if the thing that stops you working is an illness rather than an accident, because that is the half of the risk the levy does not fund.
If you want that sized rather than described, start with our income protection calculator, then talk to an adviser. QuoteHub is operated by Craig Smith Business Services Limited, trading as Smiths Insurance and KiwiSaver, a licensed Financial Advice Provider (FSP712931). Our panel is listed on our disclosure page. We are paid commission by the insurer if you take out cover, which is disclosed to you before you decide.
References
- Inland Revenue, ACC earners' levy rates (retrieved 19 August 2026): rate, maximum earnings and maximum levy by tax year
- Inland Revenue, IR335 Employer's guide (June 2026 edition, retrieved 19 August 2026): liable and non-liable payments, PAYE treatment, extra-pay rate table, per-pay maximums
- ACC, Levy Guidebook 2026/27 (retrieved 19 August 2026): the GST-exclusive earners' levy rate and the Working Safer levy
- ACC, Understanding levies if you work or own a business (retrieved 19 August 2026): what the earners' levy covers
- ACC, Understand your CoverPlus invoice (retrieved 19 August 2026): how the earners' levy appears on a self-employed invoice
- ACC, OIA response GOV-027418, levy liable earnings policy (19 September 2023, retrieved 19 August 2026): non-liable income categories
- ACC Newsroom, changes to ACC client payments from 1 July 2026 (11 June 2026, retrieved 19 August 2026): maximum weekly compensation
- ACC, injuries we don't cover (retrieved 19 August 2026): illness is outside the scheme
Disclaimer: This article is general information only and does not constitute personalised financial advice. Every levy figure on this page is reproduced from ACC or Inland Revenue as at the date stated beside it, and levy rates change on 1 April each year. Nothing here is tax advice; check your own position with your accountant. QuoteHub is operated by Craig Smith Business Services Limited, trading as Smiths Insurance and KiwiSaver, a licensed Financial Advice Provider (FSP712931), Christchurch.
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