The Accident Compensation Corporation (ACC) is one of New Zealand's most distinctive institutions. It provides comprehensive no-fault accident cover for every person in the country, whether they are a citizen, resident, or visitor. In exchange for this coverage, workers, employers, and the self-employed pay levies that fund the scheme. Understanding how these levies work, how much they cost, and what you get in return is important for both employees trying to understand their payslip and business owners managing their costs.
How ACC Works
ACC provides cover for personal injury caused by accidents, regardless of who was at fault. This includes workplace accidents, motor vehicle accidents, sports injuries, and injuries at home. In return for this cover, New Zealanders cannot sue for personal injury (with limited exceptions). The system is funded through four separate levies:
- Earner's levy: Paid by employees and self-employed individuals, deducted from wages
- Work levy: Paid by employers, based on industry classification and workplace risk
- Motor vehicle levy: Paid through vehicle registration and petrol excise
- Non-earner's levy: Paid by the Government for people not in the workforce
Earner's Levy for Employees
The earner's levy for the 2025/26 year is approximately NZ$1.60 per NZ$100 of liable earnings. This is deducted from your pay by your employer alongside PAYE tax. The maximum liable earnings are capped at around NZ$142,283, meaning the maximum earner's levy is approximately NZ$2,277 per year.
For most employees, the earner's levy is a relatively small deduction compared to income tax and KiwiSaver. On a salary of NZ$65,000, the annual earner's levy is roughly NZ$1,040, or about NZ$20 per week. It shows up as a line item on your payslip, though some payroll systems bundle it with PAYE.
Our ACC levy calculator shows the exact levy for your income level, and our salary calculator includes the ACC levy in the full breakdown of deductions from your pay.
Work Levy for Employers
Employers pay a separate work levy based on their industry classification and claims experience. The work levy varies enormously by industry:
- Office-based businesses (e.g., accounting, IT): approximately NZ$0.08–NZ$0.15 per NZ$100 of liable payroll
- Retail and hospitality: approximately NZ$0.30–NZ$0.80 per NZ$100
- Construction: approximately NZ$1.50–NZ$3.00 per NZ$100
- Forestry and logging: approximately NZ$5.00–NZ$10.00 per NZ$100
These rates reflect the relative risk of workplace injury in each industry. A forestry company pays dramatically more than a software company because the likelihood and severity of workplace injuries is much higher. Our employer cost calculator helps businesses understand the full cost of employment, including ACC levies.
Self-Employed ACC Levies
If you are self-employed, you pay both the earner's levy and the work levy yourself. The work levy is based on the industry classification (CU code) that best describes your self-employed activity. You declare your self-employed income in your annual tax return, and ACC sends you an invoice based on that income and your industry classification.
For self-employed individuals, ACC levies can be a significant cost, particularly in higher-risk industries. However, the cover provided is comprehensive: if you are injured and cannot work, ACC will pay 80% of your pre-injury earnings (up to the liable earnings cap) as weekly compensation.
Our self-employed tax calculator includes ACC levies in its calculations so you can see the full picture of your tax and levy obligations.
What ACC Cover Provides
In return for the levies, ACC provides:
- Treatment costs: Doctor visits, surgery, physiotherapy, and other treatment related to an injury are covered or subsidised
- Weekly compensation: If an injury prevents you from working, ACC pays 80% of your pre-injury weekly earnings for the duration of your incapacity
- Lump sum compensation: For permanent impairment resulting from an injury
- Rehabilitation: Vocational and social rehabilitation to help you return to work and normal life
- Death benefits: Funeral grants and survivor's grants if an injury results in death
The weekly compensation of 80% of earnings is particularly valuable. If you are injured and unable to work for several months, this cover can be the difference between financial stability and financial crisis. Self-employed individuals should be especially aware of this benefit, as they do not have sick leave or employer support to fall back on.
Key Takeaways
ACC levies are a mandatory cost of working in New Zealand, but the comprehensive no-fault cover they provide is genuinely valuable. For employees, the earner's levy is a modest payslip deduction. For employers, the work levy varies significantly by industry. And for the self-employed, ACC levies are an important cost to budget for, alongside income tax and GST. Use our salary calculator for the employee picture, and our self-employed tax calculator for the self-employed picture.