ACC Earner's Levy
The ACC earner's levy funds personal injury cover through the Accident Compensation Corporation. For 2026-27, the rate is 1.75% on earnings up to $156,641, meaning the maximum annual levy is $2,741.22 (2025-26: 1.67% up to $152,790, max $2,551.59). Earnings above the cap are not subject to the levy.
The levy is automatically deducted through the PAYE system alongside income tax — you'll see it as a separate line item on your payslip. Self-employed individuals pay the earner's levy through their annual tax return, plus an additional work levy based on their industry classification.
Unlike KiwiSaver, the earner's levy is compulsory and cannot be opted out of. The rate is reviewed annually by ACC and may change from year to year based on the scheme's funding needs.
How it works
The earner's levy is calculated on your liable earnings for each pay period and deducted automatically alongside your income tax under PAYE — you'll see it as its own line on your payslip rather than folded into the tax figure. The annual earnings cap resets at the start of each tax year, so once your year-to-date earnings pass the cap, no further levy is deducted for the rest of that year.
Self-employed people don't have an employer to deduct the levy, so they pay it as part of their annual tax return alongside provisional tax. On top of the earner's levy, self-employed people also pay a separate work levy set by ACC based on the risk profile of their industry — the earner's levy alone doesn't cover that additional business risk.
The rate and cap are reviewed by ACC each year and can move up or down depending on how much the scheme needs to fund claims and rehabilitation. Because the levy is capped, it only applies up to the annual earnings limit — income above the cap isn't levied at all, which is different from income tax, which keeps applying (at a higher marginal rate) no matter how much you earn.
Example: earner's levy at different income levels
On $100,000 of earnings for 2026-27, the levy is straightforward: 1.75% × $100,000 = $1,750, since $100,000 is below the $156,641 cap.
On $200,000 of earnings, the levy only applies up to the cap: 1.75% × $156,641 = $2,741.22 — the maximum possible levy for the year — with nothing charged on the $43,359 above the cap.
Frequently asked questions
Can I opt out of paying the ACC earner's levy?
No — the earner's levy is compulsory for anyone earning income in New Zealand; it isn't optional the way KiwiSaver contributions are.
Why did my ACC levy amount change this tax year?
Both the rate and the earnings cap are reviewed annually by ACC, so the levy you pay on the same salary can differ from one tax year to the next.
Does the levy apply to all of my income, no matter how high?
No — the levy only applies up to the annual earnings cap for that tax year; any earnings above the cap aren't subject to the earner's levy at all.
Related Terms
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