ACC Weekly Compensation NZ: How It Is Calculated
If an accident stops you working, ACC pays weekly compensation of up to 80% of your average weekly earnings before the injury, calculated before tax and deductions. You usually become eligible on day 8 after your injury, the first week is your employer's responsibility rather than ACC's, and the payment is capped at a gross maximum of $2,466.20 a week from 1 July 2026.
That headline is the easy part. What decides the number reaching your bank account is which earnings ACC averages, over what period, and whether you are on PAYE or filing your own returns. This guide walks through each step, with the current figures and the dates they took effect.
Be clear on one thing at the outset: weekly compensation is for injury, not illness. If you are off work with cancer, a cardiac event or a mental health condition unrelated to an accident, none of this applies to you , see what ACC does not cover.
When payments start, and who pays for the first week
You usually become eligible for weekly compensation on day 8 after your injury, once ACC has accepted your claim and processed your application. If it is not your first time off work for the same injury, or the time off is for approved surgery, payment may start straight away.
The first week works differently depending on where you were hurt. If you are an employee or shareholder-employee and the injury happened at work, your employer must pay you 80% of your usual pay for the first week , an obligation set out in the Accident Compensation Act 2001. ACC's employer guide explains the mechanics: the employer takes what you earned in the 7 days before the date of first incapacity and what you would have earned in the following week, then pays 80% of that figure.
If the injury happened outside work , the far more common case , there is no employer obligation. You will need to talk to your employer about using sick leave or annual leave for that first week. For most people that is the first unwelcome surprise: a week of income nobody replaces.
Your first ACC payment then covers the period from when you became eligible, not the day you applied, so the amount and the timing will not match your normal payday.
How ACC calculates it if you are an employee
ACC does not use one figure for the whole claim. It uses a short-term rate first, then switches.
For the first four weeks ACC applies the short-term rate, which is based on your earnings in the four weeks before your injury. ACC's own worked example: $5,000 earned over four weeks gives average weekly earnings of $1,250, and 80% of that is $1,000 gross before tax and deductions.
After four weeks the long-term rate takes over, and here your employment type matters:
- Permanent employees , someone who would have kept earning from the same employer for the next 52 weeks , have the long-term rate based on total income from the current PAYE job divided by the number of weeks worked, up to 52.
- Non-permanent employees , casual, seasonal, fixed-term with under a year to run, or with unpaid leave coming up , have it based on total income from all non-permanent PAYE jobs divided by 52, regardless of how many weeks were actually worked.
That second rule catches people out. Work 30 weeks of a 52-week year on a casual basis and ACC still divides by 52. The averaging is meant to smooth out bonuses, seasonal work and job changes, but for irregular earners it can pull the assessed weekly figure well below what a normal working week actually paid.
If you hold more than one job, ACC calculates each separately and adds them together, counting overlapping earnings once and in the way that gives the higher result.
How ACC calculates it if you are self-employed
On standard CoverPlus, ACC pays up to 80% of your taxable income based on the most recently completed financial year. Your filed tax return is effectively your policy schedule, and how many year-ends you have passed changes the method.
| Situation | How ACC assesses your earnings |
|---|---|
| Newly self-employed, no tax year end passed | Only PAYE earnings in the 52 weeks before injury, divided by weeks worked , self-employed income is excluded, and the payment can be zero |
| Recently self-employed, one year end passed | Declared earnings from the last tax year plus PAYE earnings in the 52 weeks before injury, divided by the number of weeks worked |
| Established, two or more year ends passed | Declared earnings from the last tax year plus PAYE earnings, divided by 52 regardless of weeks worked |
The exposure for a newly self-employed person is real and worth stating plainly: with no filed return and no PAYE history, the calculated payment may be zero. If a return is not filed yet, ACC may approve interim or estimated payments for up to three months, or an advance payment up to the full-time minimum rate.
CoverPlus Extra is the alternative. It is optional cover where payments are based on 100% of an agreed cover amount rather than your filed earnings, and the policy must be active at the time of injury.
The ceiling and the floor
Two limits sit on top of the calculation, and ACC reviews them on different cycles , the payment ceiling changes on 1 July, the minimum-wage-linked floor on 1 April.
| Figure | Amount | Effective from |
|---|---|---|
| Maximum weekly compensation, gross | $2,466.20 a week | 1 July 2026 |
| Minimum weekly compensation, full-time earner, gross | $766.40 a week | 1 April 2026 |
| Maximum liable earnings, employees | $156,641 a year | 1 April 2026 |
| Minimum liable earnings, full-time self-employed | $50,501 a year | 1 April 2026 |
The minimum is tied to the minimum wage: the gross minimum rate for a full-time earner is $766.40, equal to 80% of the adult minimum wage of $958.00 for a 40-hour week. You may qualify if you worked 30 or more hours a week in the four weeks before you stopped working, or were set up to pay levies as a full-time self-employed person.
The maximum liable earnings figure is a levy ceiling first: you pay levies only on earnings up to the maximum liable income level. Inland Revenue publishes the same threshold, confirming maximum earnings of $156,641 for 1 April 2026 to 31 March 2027.
Weekly compensation is also taxable. ACC deducts PAYE from loss of earnings compensation, and student loan, KiwiSaver and child support come out too. The 80% is gross, not what lands.
Abatement: what happens if you go back part-time
Returning to work on reduced hours or suitable duties does not end your claim. ACC adjusts the payment instead, which is called abatement, and the principle is that your total income must not be more than 100% of your usual pay.
ACC's published example runs like this: average weekly earnings before injury of $1,250, so ACC pays $1,000. You return part-time and earn $500. Total would be $1,500, which is $250 above your usual pay, so ACC reduces its payment by $250 to $750 , leaving total income of $1,250, the same as before.
You have to tell ACC. That includes changing hours, doing unpaid work, or working in an administrative or advisory capacity in your own business. Overpayments get recovered.
Where the cover stops matching the household budget
Put the mechanics together and the shape of the shortfall is clear. A fifth of your income is gone by design, and the first week is unpaid unless the injury happened at work. The payment then stops rising once you reach the gross maximum of $2,466.20 a week , about $128,000 a year annualised, so earnings above that add nothing to a claim. Irregular and newly self-employed earners can be assessed on an average that bears little resemblance to their current income.
Against that sits a mortgage payment, rates, insurance, groceries and childcare that do not fall by a fifth because you broke your leg. And none of it engages at all if what stops you working is an illness rather than an accident.
Our ACC gap calculator is built to show that difference against your own numbers, and income protection is the cover designed to sit on top of ACC and extend to illness as well as injury. For a fuller comparison of the two systems, see ACC versus private insurance.
Your next step
The useful exercise is to work out your assessed ACC figure, subtract tax, and hold it against your real monthly outgoings. Where there is a gap, an adviser can show you how the cover options compare and what they would and would not pay.
Start a comparison and we will walk through your ACC position with you , a conversation, not a sales pitch. You can read how we compare providers on our methodology page.
This article is general information only and is not personalised financial advice. ACC figures are stated with their effective dates and are subject to annual review , check acc.co.nz for the current rates before relying on them. QuoteHub is a brand of Craig Smith Business Services Limited, a licensed Financial Advice Provider, FSP712931.
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