The ACC earners levy on your wages.
ACC earners' levy
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Your breakdown
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Where the levy sits in your pay
The ACC earners' levy is the quiet line on your payslip that almost nobody asks about. It is not income tax, and it is not KiwiSaver. It is a separate compulsory deduction that funds the Accident Compensation Corporation, the scheme that covers New Zealanders for injuries that happen away from work, such as a fall on the ski field, a car crash on the weekend, or a torn ligament at touch rugby. Employers withhold it under PAYE at the same time as your tax, then pass it to Inland Revenue, which forwards it to ACC. For the 2025-26 year the rate is 1.67 percent of your liable earnings, and that is the figure this tool uses.
The number people miss is the cap. The levy only applies to earnings up to a maximum of $152,790. Earn more than that and your levy freezes; it does not keep climbing with your salary. So a surgeon on $300,000 and a manager on $152,790 pay exactly the same earners' levy, even though their tax bills differ hugely. This calculator handles the cap automatically, which is why a very high income shows a flat levy rather than a rising one.
The 1.67 percent levy on $80,000
Take someone on a $80,000 salary, the kind of figure a mid-career professional in Auckland or Wellington might earn. Their income is well below the cap, so the whole salary is liable. The levy is simply 1.67 percent of $80,000, and the tool also breaks it into a weekly figure so you can see what comes off each pay run.
That $1,336 a year is the slice ACC takes before you ever see the money. Set against the $80,000, it is a thin band, as the chart below shows, but it buys genuine cover: ACC can pay up to 80 percent of your income while you recover from a non-work injury, regardless of fault.
What happens above the earnings cap
Once your salary passes $152,790, the levy stops growing. The maximum any employee pays for 2025-26 is 1.67 percent of $152,790, which works out to about $2,552 for the year. This calculator shows that ceiling clearly: type in $200,000 and the levy still reads roughly $2,552, not the $3,340 a naive 1.67 percent would suggest. It is one of the few parts of the New Zealand system that is genuinely capped, and it is worth knowing if you are negotiating a senior salary, because the levy is one cost that does not scale with the offer.
It helps to keep the levy in proportion. Unlike PAYE, which can take a third or more of a high salary, the earners' levy is a small flat-rate slice most people never think about, because the employer handles it inside the standard pay run. There is no form to file and no choice to make. The reason it is compulsory is the bargain at the heart of ACC: New Zealanders give up the right to sue for personal injury, and in exchange everyone is covered on a no-fault basis, so an injured person does not have to prove someone else was to blame before they get help with treatment and lost income. The levy on your payslip is your share of funding that universal cover.
Can you reduce it or opt out?
A common question I hear is whether you can opt out or reduce it. For an employee, the answer is no; the rate and the cap are set nationally and applied through PAYE. The only people with levers to pull are the self-employed, who can in some cases shape their ACC cover through products like CoverPlus Extra, which lets them agree a fixed level of cover and matching levy rather than having it calculated from fluctuating annual profit. For a salaried earner, the figure this tool produces is simply what it is.
Do the self-employed pay this levy?
Not through PAYE. If you are a sole trader or contractor on schedular or self-employed income, ACC invoices you directly after you file your return, and you pay both the earners' levy and a work levy based on your business classification (your CU code). The mix of levies and the timing differ from the simple wage deduction this tool models, so a salaried earner and a self-employed person on the same income will not pay identical ACC. Use this calculator for the employee side and treat self-employed ACC as a separate annual bill.
Does the earners' levy cover injuries at work too?
No. The earners' levy funds cover for non-work injuries, the ones that happen at home, on the road, or playing sport. Injuries at work are funded separately by the work levy your employer pays on top of your wages, so you are covered around the clock, but through two different ACC accounts. That is also why your payslip only shows the earners' portion; the work levy never touches your gross pay.