Summary

The Accident Compensation Corporation (ACC) collects money (called levies) to pay for the help they provide to people who are injured in accidents outside of work and not on the road – eg at home, playing sport or while taking part in recreational activities.

All employees must pay ACC earners' levy. This has been built into the PAYE tables and is deducted along with PAYE.

ACC earners' levy calculations are based on the annual values set by the IRD. For more information please refer to the IRD website.

If the employee's annual earnings are over the threshold, the ACC earners' levy is capped at the maximum levy and divided by the employee's pay periods in the year.

If the employee's annual earnings are under the threshold, ACC earners' levy is calculated as: Taxable Gross * ACC Levy Rate.

For more information, including rates and thresholds, please refer to the IRD website.

Ordinary Pay Sequences

PayGlobal considers only current pay values when it calculates the employee's annual pay. PayGlobal does not round the earners' levy value, it truncates the amount to whole cents.

For more information on ACC Earners' Levy, please refer to the IRD website.

Extra Pays

Primary Tax Code holders

1. If the extra pay is redundancy, retirement allowance or Employee Share Scheme benefit, the ACC earners' levy is $0.00 because it is income that is not liable for earners' levy.
2. If the grossed-up amount does not exceed the ACC Threshold then ACC Earners’ Levy is the extra pay multiplied by the current ACC rate
3. If the annualised income does not exceed the ACC Earner Levy threshold but the grossed-up amount does, then the ACC earners' levy amount is the ACC Threshold minus the annualised income multiplied by the ACC rate.
4. If the annualised income exceeds the ACC Earners Levy then the ACC earners' levy is $0.00

Secondary Tax Code holders

1. If the extra pay is redundancy, retirement allowance or Employee Share Scheme benefit, the ACC earners' levy is $0.00 because it is income that is not liable for earners' levy.
2. If the annualised amount plus the low threshold amount exceeds the ACC Earners threshold then ACC Earners’ Levy on the extra pay is $0.00
3. If the grossed amount does not exceed ACC Earners’ Levy, then the Extra Pay is multiplied by the current ACC Earners Levy rate
4. If the annualised income plus the low rate threshold amount does not exceed the ACC Earner Levy threshold but the grossed-up amount does, then the ACC earners' levy amount is the ACC Threshold minus the (annualised income plus the low rate threshold) multiplied by the current ACC rate.

For more information on taxing lump sum payments, please refer to the IRD website.