ACC Levy Explained
The ACC earner's levy is 1.67% of your gross income, up to a maximum income of $152,790 (ACC, 2025-26). That means the most you'll ever pay is $2,552 per year. It's deducted from every payslip alongside your PAYE tax, and it funds New Zealand's no-fault accident cover system.
Try the Forge Money PAYE calculator to see your exact ACC levy, PAYE, and take-home pay.
What is the ACC earner's levy?
ACC stands for the Accident Compensation Corporation. It runs New Zealand's universal accident insurance scheme. If you're injured in an accident, anywhere in the world, ACC covers your treatment costs and a portion of your lost income. In return, you give up the right to sue for personal injury. Every worker in NZ pays into the scheme (IRD).
The earner's levy is the portion that employees and self-employed people pay from their income. It covers non-work injuries, things like weekend sports injuries, car accidents, or slipping on the footpath. Your employer also pays a separate work levy to cover workplace injuries, but that doesn't come out of your pay.
The levy applies to all salary and wage income, as well as self-employed earnings. You don't get a choice about paying it. It's collected automatically through the PAYE system by IRD on behalf of ACC.
Current ACC earner's levy rate (2025-26)
The earner's levy rate for the 2025-26 tax year is 1.67% on earnings up to $152,790 (ACC). Once your income exceeds that cap, you don't pay any additional levy on the income above it.
| Annual income | ACC earner's levy | Weekly cost |
|---|---|---|
| $30,000 | $501 | $9.63 |
| $50,000 | $835 | $16.06 |
| $65,000 | $1,086 | $20.88 |
| $85,000 | $1,420 | $27.31 |
| $100,000 | $1,670 | $32.12 |
| $120,000 | $2,004 | $38.54 |
| $152,790+ | $2,552 (maximum) | $49.08 |
The calculation is straightforward: multiply your gross income by 0.0167. If you earn more than $152,790, multiply $152,790 by 0.0167 instead, because that's the cap.
How the ACC levy is deducted
The ACC levy is deducted from your pay by your employer, alongside PAYE income tax. You don't need to do anything. It's calculated on each pay period (weekly, fortnightly, or monthly) and sent to IRD, who pass it on to ACC.
On your payslip, you'll typically see it listed as "ACC Earner's Levy" or just "ACC." Some payroll systems combine it into a single "tax" line with PAYE, but most separate them out. If you're unsure, check your payslip or ask your payroll team.
If you file an individual tax return (IR3), your ACC levy is calculated as part of your end-of-year tax assessment. IRD will include it in any tax to pay or refund owing.
ACC levy history
The earner's levy rate changes periodically based on ACC's funding needs. Here's how it has moved over recent years (ACC):
| Tax year | Earner's levy rate | Maximum liable income |
|---|---|---|
| 2025-26 | 1.67% | $152,790 |
| 2024-25 | 1.60% | $139,384 |
| 2023-24 | 1.53% | $136,544 |
| 2022-23 | 1.46% | $133,681 |
| 2021-22 | 1.21% | $130,911 |
| 2020-21 | 1.21% | $130,911 |
The rate rose from 1.21% in 2021-22 to 1.67% in 2025-26, reflecting increased claim costs. The maximum liable income is adjusted annually based on wage inflation.
Self-employed ACC levies
If you're self-employed, your ACC situation is different. You pay two levies instead of one (ACC):
- Earner's levy: The same 1.67% that employees pay, covering non-work injuries.
- Work levy: Covers you for work-related injuries. The rate depends on your industry classification (CU code). High-risk industries like forestry or construction pay more than desk-based work.
Self-employed levies are calculated by ACC based on your taxable income from your IR3 tax return. ACC sends you an invoice directly, usually in the second half of the year following the income year. The work levy rates vary significantly by industry. For example, office-based businesses might pay around 0.08% while high-risk trades can pay over 3% (ACC).
If you're self-employed and want to estimate your total ACC cost, check the ACC levy guidebook for your specific CU classification at acc.co.nz.
Worked examples
Example 1: $65,000 salary with 4% KiwiSaver
Examples use 4% KiwiSaver, the default rate from April 2028. The current rate may be 3% or 3.5%.
| Deduction | Calculation | Annual amount | Weekly amount |
|---|---|---|---|
| PAYE | Progressive rates (see below) | $11,721 | $225.39 |
| ACC earner's levy | $65,000 x 1.67% | $1,086 | $20.88 |
| KiwiSaver (4%) | $65,000 x 4% | $2,600 | $50.00 |
| Total deductions | $15,407 | $296.29 | |
| Take-home pay | $49,593 | $953.71 |
PAYE breakdown (IRD, 2025-26 rates):
| Income bracket | Tax rate | Tax amount |
|---|---|---|
| $0 to $15,600 | 10.5% | $1,638 |
| $15,601 to $53,500 | 17.5% | $6,633 |
| $53,501 to $65,000 | 30% | $3,450 |
| Total PAYE | $11,721 |
On a $65,000 salary, the ACC levy costs you about $21 per week. That's about 1.67% of your gross pay, or roughly 7% of your total deductions.
Example 2: $100,000 salary with 4% KiwiSaver
| Deduction | Calculation | Annual amount | Weekly amount |
|---|---|---|---|
| PAYE | Progressive rates (see below) | $22,878 | $439.95 |
| ACC earner's levy | $100,000 x 1.67% | $1,670 | $32.12 |
| KiwiSaver (4%) | $100,000 x 4% | $4,000 | $76.92 |
| Total deductions | $28,548 | $548.98 | |
| Take-home pay | $71,452 | $1,374.08 |
PAYE breakdown (IRD, 2025-26 rates):
| Income bracket | Tax rate | Tax amount |
|---|---|---|
| $0 to $15,600 | 10.5% | $1,638 |
| $15,601 to $53,500 | 17.5% | $6,633 |
| $53,501 to $78,100 | 30% | $7,380 |
| $78,101 to $100,000 | 33% | $7,227 |
| Total PAYE | $22,878 |
At $100,000, your ACC levy is $1,670 per year, or about $32.12 per week. Your effective total deduction rate (PAYE + ACC + KiwiSaver) is about 28.5% of gross income.
Common questions
What is the ACC levy rate for 2025-26?
The ACC earner's levy rate is 1.67% for the 2025-26 tax year (1 April 2025 to 31 March 2026). It applies to earnings up to $152,790, giving a maximum annual levy of $2,552 (ACC).
Is the ACC levy compulsory?
Yes. Every person who earns salary, wages, or self-employment income in New Zealand pays the ACC earner's levy. It's deducted automatically through the PAYE system for employees. There is no opt-out (ACC).
Do self-employed people pay ACC?
Yes. Self-employed people pay both the earner's levy (1.67%) and a work levy that varies by industry. ACC invoices self-employed people directly based on their taxable income from their IR3 return (ACC).
Can I opt out of ACC?
No. ACC is a compulsory, universal scheme. You cannot opt out of paying the levy or receiving cover. In exchange, New Zealand law prevents you from suing for personal injury, which is the trade-off built into the system (Accident Compensation Act 2001).
Does ACC cover me overseas?
Yes, if you're ordinarily resident in NZ. ACC covers injuries that happen while you're temporarily overseas, for example on holiday or a business trip. The key word is "temporarily." If you move overseas permanently, your ACC cover eventually ends. The exact rules depend on how long you're away and whether you maintain NZ tax residency (ACC).
What does ACC actually cover?
ACC covers the costs of treatment and rehabilitation for personal injuries caused by accidents. This includes doctor visits, surgery, physiotherapy, medication, and a portion of lost wages if you can't work (80% of your pre-injury income, up to a weekly cap). It also covers injuries from medical treatment and some work-related gradual-process diseases (ACC).
How is ACC different from health insurance?
ACC covers accident-related injuries only. Health insurance covers illness, elective surgery, specialist consultations, and other medical costs not caused by accidents. If you break your leg skiing, ACC pays. If you need a hip replacement due to arthritis, that's the public health system or private health insurance, not ACC. Many Kiwis have both ACC cover (compulsory) and private health insurance (optional) to fill the gaps (ACC).
Does the ACC levy appear on my tax return?
If you're an employee and only earn salary or wages, the ACC levy is handled by your employer through PAYE and doesn't appear separately on your income tax assessment. If you file an IR3 (for example, as a sole trader or because you have other income), ACC levies are calculated as part of that process and will show on your assessment (IRD).
What to do next
- Calculate your take-home pay including PAYE, ACC, and KiwiSaver
- Understand NZ tax brackets and how progressive tax works
- See how KiwiSaver contribution rates affect your pay
Last updated: 28 March 2026. Sources: ACC (acc.co.nz), IRD (ird.govt.nz). This is educational content, not financial advice.
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This is educational content, not financial advice.