Next to income tax on your payslip sits a smaller deduction most people never question: the ACC earners' levy. It is not a tax — it is the premium for New Zealand's universal, no-fault injury cover, and it works quite differently from income tax.
What the levy pays for
The earners' levy funds cover for injuries that happen outside work — at home, on the road on personal time, playing sport. Work injuries are covered by a separate levy your employer pays. Because cover is universal, you cannot opt out, and in exchange you generally cannot sue for personal injury in New Zealand.
A flat rate, up to a ceiling
For the 2026-27 year the levy is 1.75% (GST inclusive) of your earnings, but only on the first $156,641. That gives a maximum levy of $2,741.22 a year. Every dollar you earn above the ceiling pays no levy at all.
A worked example: on a $60,000 salary the levy is $60,000 × 1.75% = $1,050 a year, about $20 a week. On a $200,000 salary it is capped at $2,741.22 — the same as someone on $156,641 pays. This is why the combined tax-plus-levy line flattens slightly for very high earners.
It moves every year
The rate and the ceiling are set by regulation and adjust most years: 1.60% to $142,283 in 2024-25, 1.67% to $152,790 in 2025-26, 1.75% to $156,641 in 2026-27. It is one of the reasons a “same salary” can produce a slightly different take-home figure from one April to the next.
What it means for your budget
For most earners the levy is roughly one to two percent of gross pay — real money, but stable and predictable. When you compare job offers or model a pay rise, remember that the levy applies to the new dollars too (until the cap), so the take-home difference is always a little smaller than the gross difference. The take-home calculator applies the correct year's rate and cap automatically.