ACC Earner's Levy Explained: 2025-26 Rates, Cap & How It Works

If you’ve ever looked closely at your payslip and wondered what “ACC Earner’s Levy” is, you’re not alone. It’s one of those deductions that appears every pay period but rarely gets explained. This guide covers what the levy is, the 2025-26 rate and cap, how it’s calculated, what you get in return, and how employer levies work.

What Is the ACC Earner’s Levy?

The ACC Earner’s Levy is a compulsory deduction that funds Accident Compensation Corporation (ACC) — New Zealand’s nationwide no-fault accident insurance scheme. ACC covers medical costs and income replacement for anyone who suffers a personal injury in New Zealand, regardless of who was at fault.

As an employee (or self-employed person), you pay the Earner’s Levy on your wages or salary. In return, you’re covered if you have an accident — whether it happens at work, at home, while exercising, or anywhere else.

2025-26 Rate and Cap

Parameter	2024-25	2025-26
Earner’s levy rate	1.60%	1.67%
Maximum liable earnings	$142,283	$152,790
Maximum annual levy	$2,276.53	$2,551.59

Both the rate and the cap increased from 2024-25. The rate rose from 1.60% to 1.67%, and the maximum liable earnings cap increased from $142,283 to $152,790. The cap is indexed to average weekly earnings and is reviewed by ACC annually.

The cap means you stop paying the levy once your earnings reach $152,790. Any earnings above this threshold are not subject to the Earner’s Levy — so the maximum anyone can pay is $2,551.59 per year, no matter how high their income.

How the Levy Is Calculated

The calculation is straightforward: 1.67% × gross earnings (up to the $152,790 cap).

Example — $85,000 annual salary:

Annual levy = $85,000 × 1.67% = $1,419.50 per year (~$27.30/week)

Example — $160,000 annual salary:

The levy applies only up to the cap: Annual levy = $152,790 × 1.67% = $2,551.59 per year

Even though this person earns $160,000, they pay the same maximum levy as someone earning $152,790.

How the Levy Appears on Your Payslip

For employees, the ACC Earner’s Levy is deducted by your employer through the PAYE system, alongside income tax and any KiwiSaver contributions. It’s calculated on your gross earnings — your pay before any other deductions. Your payslip will typically show it as a separate line item, sometimes labelled “ACC Levy” or “Earner’s Levy.”

On weekly pay, the 1.67% is applied to that week’s gross earnings; on a fortnightly cycle, it applies to the fortnight’s earnings, and so on.

Because the cap is an annual limit, most payroll systems track cumulative earnings and stop deducting once you pass $152,790 during the year. If you change jobs mid-year, your new employer may not know what you have already paid — you could overpay during the year and receive a refund when IRD reconciles your account, much like overpaid PAYE tax.

Example — weekly pay of $3,000 gross:

• ACC levy: $3,000 × 1.67% = $50.10 per week
• Annual equivalent: $50.10 × 52 = $2,605.20 — but capped at $2,551.59
• Levy stops being deducted once cumulative earnings pass $152,790 (around week 51 of the year)

What Does the Levy Cover?

The ACC Earner’s Levy specifically funds personal injury caused by accident — for earnings you make outside of work. It covers things like:

• Sports injuries
• Injuries at home (slips, falls)
• Motor vehicle accidents (as a passenger or pedestrian)
• Injuries while on holiday in New Zealand
• Accidental ingestion of a substance

For injuries suffered at work, a separate Work Levy is paid by your employer. For treatment injuries (injuries caused by medical or dental treatment), yet another ACC fund applies.

What ACC covers in all cases:

• Medical costs: Doctor visits, surgery, physiotherapy, specialist appointments related to the injury
• Weekly compensation: Up to 80% of your pre-injury income if you can’t work due to an accident
• Rehabilitation: Support to help you return to work or daily activities
• Lump sum payments: For serious injuries causing permanent impairment
• Death benefits: Payments to surviving dependants if an accident is fatal

What ACC does not cover:

• Illness or disease (except in specific circumstances)
• Self-inflicted injuries
• Injuries that occur overseas (though you can apply for treatment on return)
• Mental injury unless caused by a physical injury

Self-Employed People

Self-employed people and sole traders pay the earner’s levy directly to ACC — not through an employer. The same rate and cap apply:

• Rate: 1.67% on net earnings from self-employment
• Cap: $152,790 maximum liable earnings
• Maximum payable: $2,551.59

ACC invoices self-employed people for their levies, typically after the end of the tax year once IRD shares your income information with ACC. New self-employed people may receive a first levy bill based on an estimate, then have it adjusted once actual income is confirmed.

Self-employed people also pay the work levy — the employer-side component — which varies by industry and is invoiced by ACC separately.

Employer Work Levy

The employer work levy is a separate charge paid by the employer that does not appear on the employee’s payslip. It is calculated on the employer’s total payroll and rates vary by industry, based on ACC’s classification system and the historical claims experience of that sector.

Approximate work levy rates for 2025-26 (GST-exclusive, indicative):

Industry	Approximate work levy rate
Office and administrative work	0.16% – 0.25%
Retail trade	0.30% – 0.55%
Construction	1.50% – 3.00%
Agriculture	2.00% – 4.00%
Forestry / logging	4.00% – 7.00%

Employers can find their specific rate on ACC’s levy calculator at acc.co.nz. Large employers on experience rating may pay above or below the standard rate based on their actual claims history. Employers with a strong safety record may also qualify for the ACC Workplace Safety Management Practices (WSMP) programme, which can reduce the work levy by up to 20%.

Is the Levy Tax-Deductible?

For employees, the ACC Earner’s Levy is not tax-deductible. It’s deducted from gross pay before income tax is calculated, but this doesn’t reduce your taxable income — it’s simply collected alongside PAYE.

For self-employed people, the situation is different: the self-employed portion of ACC levies may be deductible as a business expense. This should be confirmed with a tax adviser as the rules depend on your specific circumstances.

Year-on-Year Impact

For most employees, the higher rate of 1.67% (up from 1.60%) is the main change. For high earners, the cap increase from $142,283 to $152,790 also adds to the levy. For an employee earning $160,000, their total earner’s levy in 2025-26 is $2,551.59 — up from $2,276.53 in 2024-25 — a difference of $275.06 for the year.

The Unique Value of ACC

New Zealand’s ACC scheme is unusual internationally. In most countries, if you’re injured, you either rely on private health insurance, the public health system, or you sue the person responsible.

In NZ, fault is irrelevant. Whether you were injured because of your own carelessness, someone else’s negligence, or pure bad luck, ACC steps in immediately. The trade-off is that by accepting ACC coverage, New Zealanders give up the right to sue for personal injury in most circumstances. This no-fault compromise keeps the system efficient and universal.

How to Check Your ACC Levy

You can view your ACC levy deductions through:

• MyIR at ird.govt.nz (your tax summary will include ACC deducted)
• Your payslips throughout the year
• Your end-of-year tax summary (which may trigger a refund or bill if deductions were off)

Summary

• The ACC Earner’s Levy is 1.67% of gross earnings for 2025-26
• The annual earnings cap is $152,790 — maximum levy is $2,551.59
• It’s deducted automatically from employee wages through PAYE
• It funds ACC’s no-fault accident compensation scheme — covering medical costs, income replacement, and rehabilitation
• Self-employed people pay ACC invoices directly after filing their tax return
• Employer work levies are separate, not visible on your payslip, and vary by industry

Use the ACC Levy Calculator to calculate your exact annual and weekly levy based on your income.