Levy round

ACC caps self-employed cover at $125,313, and pays nothing when it is illness that stops you working

Source: ACC, CoverPlus Extra (CPX) cover options

CoverPlus Extra tops out at $125,313 for 2026/27, exactly 80% of the income ACC charges levies on. That is 62.7% of a $200,000 income and 50.1% of a $250,000 one. And ACC's weekly compensation only ever follows an injury, so the illness gap applies at every income.

By Henry Smith · ACC · 2026-07-27

What this means for you Self-employed people earning above $156,641 cannot insure more than $125,313 of income through ACC, whatever they pay. That covers 80% of income at the cap, but only 50% of a $250,000 income. The gap against a typical 75% private policy opens at $167,084 and widens with every dollar above it.

Written by Henry Smith · Reviewed by Smiths Insurance & KiwiSaver, licensed Financial Advice Provider (FSP712931)

If you work for yourself, ACC will not insure an income above $125,313 for the 2026/27 year, whatever you are willing to pay (ACC). And if what stops you working is an illness rather than an injury, ACC pays nothing at all, because weekly compensation only ever follows an accident (ACC).

Those are the two hard edges of the scheme every self-employed New Zealander is inside by default. The most ACC will ever pay one of them is about $2,410 a week before tax, which is $125,313 spread across 52 weeks. For a contractor on $200,000 a year that ceiling covers 62.7% of income. At $250,000 it covers 50.1%, because the cover stays frozen while the income grows.

CoverPlus Extra, or CPX, is the version people buy when they want certainty. It is ACC's optional cover for self-employed people and for company owners who pay themselves outside PAYE, the system where tax comes out of every payslip. Normally ACC works out your payout from your accounts after an accident. With CPX you agree a fixed amount up front instead, so there is no argument at claim time. It is the product where you choose your own number, and $125,313 is the largest number on the menu.

Chart: QuoteHub arithmetic on the CPX maximum published on ACC's own page and on its liable-earnings cap (ACC, Calculating your levies). Illustration of the ceiling arithmetic only, not a quote and not advice.

Does the ceiling apply to me?

Most self-employed people never reach it. Earn under about $156,641 and the ceiling is not your issue, because ACC's compensation rate of 80% of your declared earnings is more generous than the 75% a standard private income protection policy pays (AIA policy wording, effective 23 July 2021).

Earn above $167,084 and it flips. From that point, 75% of your real income is a bigger number than ACC's frozen $125,313, and there is no levy you can pay to close the difference.

The illness gap does not work like that. It does not depend on what you earn, and it applies to every self-employed person from the first dollar.

Why does CPX stop at $125,313?

Because the maximum is ACC's levy cap with ACC's own compensation rate applied to it. Standard CoverPlus, the cover self-employed people get by default, pays "up to 80% of your earnings you've declared, or intend to declare, with Inland Revenue before your injury" (the same ACC weekly compensation page). Those declared earnings have a name, your liable earnings, and ACC's levy calculation page stops counting them at $156,641 for 2026/27. Anything above that line is ignored.

Multiply ACC's two levy limits by 80% and the published CPX range comes out to the dollar.

	ACC's levy figure	Times 80%	Published CPX limit
Maximum	$156,641 earnings cap	$125,312.80	$125,313
Minimum	$50,501 minimum full-time income	$40,400.80	$40,401

CPX limits from ACC's CPX page; levy figures from the same ACC levy calculation page. Each multiplication rounds up to the next whole dollar.

So the product that lets you choose your own cover stops at exactly what the default cover would pay someone sitting right at the earnings cap. ACC's page states the maximum. It never says where the number comes from, and never says what it leaves out.

Why will ACC not take a bigger levy and pay more?

Because the ceiling mirrors what you put in. ACC charges the earners' levy at $1.75 per $100 of liable earnings, GST included, and stops charging at the same $156,641 (Inland Revenue).

On those same figures, the biggest earners' levy bill anyone gets is $2,741.22 a year. Someone on $250,000 pays exactly that, and so does someone on $156,641. The $93,359 between them is invisible to ACC: no levy is charged on it, and no compensation is ever paid on it. Inside the scheme the books balance. Outside it, that risk sits with the earner.

How does a private policy compare?

A private income protection policy usually runs on an indemnity basis, which works differently. Indemnity means the insurer checks what you were actually earning when you claim, then pays a share of it. In AIA's current wording that share is 75%. Each month it pays whichever is smaller, one twelfth of the amount on your policy schedule or "75% x pre-disability income", then subtracts offsets, meaning other payments you receive for the same disability, a list that includes "ACC entitlements for the same disability" (the same AIA wording). The difference from CPX is that the 75% is a share of your real income, with no $125,313 ceiling sitting behind it.

Annual income	What a 75% policy can insure	ACC's CPX maximum	Cover only a private policy can reach
$200,000	$150,000	$125,313	$24,687 a year (12.3% of income)
$250,000	$187,500	$125,313	$62,187 a year (24.9% of income)

QuoteHub arithmetic on the CPX maximum from the same ACC CPX page and the 75% ceiling in the AIA wording cited above. The crossover sits at $167,084 of income, which is $125,313 divided by 0.75.

Below that crossover, CPX's 80%-of-the-cap ceiling can still match or beat a 75% policy. Above it, ACC falls further behind with every dollar you earn.

What does this mean for my cover?

Under about $156,641, what CPX buys you is certainty. ACC pays the agreed amount without going back through your accounts while you are trying to recover, which matters most if your income is lumpy or your business is young. At that level the choice against a private income protection policy turns on two other things: what each one counts as being unable to work, and how long each keeps paying.

Above $167,084 the arithmetic is your problem, and it has two parts. Size: ACC will not insure more than $125,313 of your income, whatever you are willing to pay. Scope: an illness that stops you working sits outside the scheme entirely. Cancer, a heart attack or a breakdown: ACC pays nothing, and that ground belongs to private income protection and trauma cover.

One thing cuts the other way. Because a private indemnity policy subtracts what ACC pays for the same disability, you cannot stack the two and collect both in full. So the practical question for anyone near or above the cap is not which one wins. It is how large the private layer sitting on top of ACC needs to be, and that is worth comparing across insurers rather than inside one.

What could we not check?

ACC's CPX page publishes the $40,401 to $125,313 range but never explains it. The link to 80% of the levy cap is our own arithmetic, built from ACC's published compensation rate and its published earnings limits, and each multiplication rounds up by 20 cents to the next whole dollar. ACC may describe the mechanics differently in its levy regulations, which we have not read.

Our levy rate comes from Inland Revenue rather than ACC. ACC's own levy results page quotes the 2026/27 earners' levy as $1.52 per $100 (ACC), which is the same rate quoted before GST. Adding GST multiplies it by 1.15, so $1.52 becomes $1.748. We used the GST-inclusive figure because it is what earners actually pay.

The 75% private ceiling comes from one insurer's policy wording, dated 23 July 2021. It is a market convention, not a rule. Other insurers' terms differ, and so do agreed-value contracts, which fix the payout up front instead of checking your income at claim time. Some products cover a smaller share at higher incomes.

We make no claim about what any private policy costs, and we make no price comparison between CPX and private cover. CPX levies are worked out on the agreed cover amount, and we have not analysed them. One last limit: ACC's page does not say whether it will agree to cover more income than you can actually show, so we have treated $125,313 as the most anyone can get, not an amount everyone can have.

What this means for your cover

ACC pays for accidents, not illness, and it stops at a published ceiling. Income protection is the cover that answers both. Income protection in New Zealand

Sources

Every source below was read and checked on 21 August 2026.

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