Liable earnings (Work and Earners’ levies) 2022-2025
|Your ‘liable earnings’ as a business or an individual will determine the amount you pay in ACC Work and Earners’ levies. The term ‘liable earnings’ describes the income you pay your ACC levies on. ‘Liable’ refers to any income that does not fall below the minimum, or go above the maximum, thresholds.|
- For employees, liable earnings are wages or salaries you earn in a financial year.
- For employers, liable earnings are the wages or salaries you pay your employees in a financial year. This amount is shared with us from your payroll department or Inland Revenue.
- For self-employed people, liable earnings are the income you earn in a financial year as declared on your end-of-year tax returns.
You don’t need to pay levies on earnings from investments or trusts, as these are considered ‘passive income’. This is income you’d still receive if you couldn’t work due to an accident.
Why maximum and minimum liable earnings are set
Every year maximum (currently $130,911) and minimum (currently $36,816) amounts are set for the earnings that people working full-time – more than 30 hours – are liable to pay ACC levies for. If you earn over the maximum amount, you don’t pay anything beyond this limit – you just pay a levy on your earnings up to that point.
These increases also apply to weekly compensation entitlements for those that have been injured and are unable to work.
Proposal to increase both the maximum and minimum amount
We propose to update the maximum amount in line with changes in the labour cost index and the minimum amount in line with the labour cost estimate and current minimum wage changes. Based on this, we’re proposing the following changes to the maximum and minimum liable earnings that you pay your ACC levies on and to weekly compensation entitlements (up to 80% of liable earnings).
|From (current amount)||
Proposed for 2022-23
|Proposed for 2023-24
|Proposed for 2024-2025 levy period|
Maximum liable earnings applies to the levies, and weekly compensation entitlements, for everyone.
Minimum liable earnings apply to the levies for self-employed and sole traders only. The minimum is also used to determine eligibility for the No Claims Discount programme for small businesses.
Note: Employees include private domestic workers. A private domestic worker is a person who works for another person (an employer) in the employer’s home. Private domestic workers include home-helpers, caregivers, nannies and gardeners. They’re specifically mentioned in the legislation alongside employees. You’re not a private domestic worker if you provide an ACC client with attendant care.