What is ACC Earners' Levy?
ACC Earners' Levy is a premium paid by NZ workers to cover the cost of non-work related injuries. It is collected by Inland Revenue on behalf of the Accident Compensation Corporation (ACC). For most people ACC Earners' Levy will be automatically deducted from their pay and remited to IRD by their employer.
Who pays ACC Earners' Levy?
ACC Earners' Levy is payable on most income in New Zealand, up to an agreed maximum yearly amount. Income liable for the levy includes includes things such as:
- wages
- salaries
- back pay and holiday pay
- overtime pay
- long-service pay
- bonuses or gratuities
- taxable allowances
- shareholder-employee salaries from which PAYE is deducted
- salaries to partners in a partnership
Historical Earners' Levy Rates
| Income year | Earners' levy (%) | Maximum income used (*) | Maximum levy payable |
|---|---|---|---|
| 1 April 2024 to 31 March 2025 | 1.60% | $142,283 | $2,276.52 |
| 1 April 2023 to 31 March 2024 | 1.53% | $139,384 | $2,132.57 |
| 1 April 2022 to 31 March 2023 | 1.46% | $136,544 | $1,993.54 |
| 1 April 2021 to 31 March 2022 | 1.39% | $130,911 | $1,819.66 |
| 1 April 2020 to 31 March 2021 | 1.39% | $130,911 | $1,819.66 |
| 1 April 2019 to 31 March 2020 | 1.39% | $128,470 | $1,785.73 |
| 1 April 2018 to 31 March 2019 | 1.39% | $126,286 | $1,755.37 |
| 1 April 2017 to 31 March 2018 | 1.39% | $124,053 | $1,724.33 |
| 1 April 2016 to 31 March 2017 | 1.39% | $122,063 | $1,696.67 |
| 1 April 2015 to 31 March 2016 | 1.45% | $120,070 | $1,741.01 |
| 1 April 2014 to 31 March 2015 | 1.45% | $118,191 | $1,713.76 |
| 1 April 2013 to 31 March 2014 | 1.70% | $116,089 | $1,973.51 |
| (*) Income earned over the Maximum income threshold is not subject to earners' levy. | |||
How is the ACC Earners' Levy rate determined each year?
The ACC Earners' Levy rate is set annually by ACC and approved by the government. It is calculated based on the projected costs of covering work-related and non-work-related injuries for the upcoming year, as well as the need to maintain a sustainable fund for future claims.
Are there any exemptions or deductions available for ACC Earners' Levy?
While there are no specific exemptions for the ACC Earners' Levy, individuals earning below a certain threshold may not be required to pay the levy. Additionally, certain types of income such as investment income, may not be subject to the levy.
Do the self-employed pay ACC earners levy?
Yes, self-employed individuals in New Zealand are required to pay the ACC Earners' Levy as part of their ACC levies. The ACC Earners' Levy is charged on their taxable income and contributes to the cost of non-work-related injuries covered by ACC.
How does the ACC Earners' Levy contribute to the overall funding of ACC?
The ACC Earners' Levy is a significant source of funding for the Accident Compensation Corporation, covering a portion of the costs associated with non-work-related injuries. The exact percentage of ACC's funding that comes from this levy varies each year, depending on the total revenue collected and the expenses incurred.
What happens if an individual overpays or underpays their ACC Earners' Levy, and how can they rectify that?
Although not common, if an individual overpays or underpays their ACC Earners' Levy they should contact the IRD with details of the incorrect payments. This can be done through the myIR portal or by phoning IRD.
Overpayments may result in a refund or credit, while underpayments may require additional payment to ensure compliance with the levy requirements.
ACC Earners Levy Articles
Employees to save 17% on ACC levies from 1 April 2014
Earners' levy rates are dropping to $1.45 per $100 of liable earnings from 1 April 2014. The Earners' levy income cap is also being adjusted.
ACC earners' levy reduces to 1.7% on 1 April 2012
NZ Salary and wage earners will receive more net pay from the 1st of April as the ACC earners' levy drops to 1.70% from 2.04%.