ACC Weekly Compensation
ACC weekly compensation pays 80% of the income you earned before your injury, and it is taxed like a salary, so PAYE comes off before you receive it. Payments usually begin on day 8 after the injury, and the calculation changes after 4 weeks.
The other half of the ACC line on your payslip
Every payday, 1.75% of your income up to $156,641 is taken as the earners' levy, a maximum of $2,741.22 a year. This page is what that buys. Weekly compensation is the income replacement the levy funds, and it is the reason the levy is not simply another tax.
Two calculations, four weeks apart
Both pay 80%. What changes is the earnings figure they apply it to, which is why the amount often moves in the second month.
| Period | Earnings figure used | Example | Weekly at 80% |
|---|---|---|---|
| First 4 weeks | Earnings in the 4 weeks before injury, divided by 4 | $5,000 over 4 weeks | $1,000.00 |
| After that, permanent employee | Total income from the current job, divided by weeks worked, up to 52 | $58,800 over 49 weeks worked | $960.00 |
| After that, non-permanent employee | Total income from all non-permanent jobs, divided by 52 regardless of weeks worked | $52,000 over the year | $800.00 |
The permanent and non-permanent divisors are the detail that catches people out. A permanent employee divides by the weeks actually worked, so three weeks of agreed unpaid leave lifts the weekly figure. A casual, seasonal or fixed-term worker always divides by 52, so quiet weeks pull the figure down.
Short-term rate, gross to what arrives
- 1.Earnings in the 4 weeks before injury$5,000
- 2.Average weekly earnings$1,250.00
- 3.ACC pays 80%Gross, before tax and deductions$1,000.00
- 4.PAYE, and any student loan, child support or KiwiSaverExactly as they would be from a payslipdeducted
- Weekly compensation, gross$1,000.00
80% of gross is not 80% of your take-home pay
The 80% is applied to your gross earnings, and then tax comes off the result. Your student loan repayment of 12% and any child support deduction come off too. So the payment reaching your account is not 80% of what you used to bank. Run the gross figure through the take-home pay calculator to see the real number before you budget against it.
Returning to work: abatement, and why it favours you
If you go back on reduced hours or lighter duties, you keep receiving compensation alongside your wages. ACC reduces the compensation so the two together come to no more than 100% of your usual weekly earnings. That reduction is called abatement.
| Not working | Working reduced hours | |
|---|---|---|
| Usual weekly earnings before injury | $1,250.00 | $1,250.00 |
| Earned from work | $0.00 | $500.00 |
| Paid by ACC | $1,000.00 | $750.00 |
| Total, before tax | $1,000.00 | $1,250.00 |
| Share of your usual pay | 80% | 100% |
Abatement is often read as a penalty for working. The arithmetic says the opposite: not working leaves you on 80% of your usual pay, and working reduced hours takes you back to 100%. The compensation falls, your total rises.
Tell ACC before you start earning, not after
ACC abates on the earnings you report. If you start work without telling them, the compensation carries on unabated and the overpayment is recoverable from you later. Reporting hours as you go avoids that entirely.
The second thing to arrange is your tax code. Two income sources at once means one of them needs a secondary tax code, and ACC points people to Inland Revenue to sort it. Leaving a main code on both is the standard route to an end-of-year bill.
When it starts
Weekly compensation usually becomes payable on day 8 after the injury. Payment can start immediately where this is not the first period off work for the same injury, or where the time off is for approved surgery. Some employers manage compensation for work injuries themselves, so it is worth checking with your employer before applying to ACC directly.
Next
- ACC leviesWhat funds this, and the annual cap
- ACC levy calculatorYour levy on your own income
- Secondary taxThe code for a second income source
- PAYE tax ratesThe rates applied to the payment
- take-home pay calculatorWhat the gross figure is worth after tax
Common questions
How much does ACC pay when you cannot work?
Up to 80% of your pre-injury income, before tax. On $1,250.00 a week that is $1,000.00 gross. Payments usually start on day 8 after the injury.
Is ACC weekly compensation taxed?
Yes. PAYE is deducted before you receive it, and child support, student loan and KiwiSaver contributions can come off too. The 80% is a gross figure, so what arrives is well under 80% of your old take-home pay.
Why did my ACC payment change after four weeks?
The calculation changes. The first 4 weeks use your earnings in the 4 weeks before the injury. After that it is based on up to 52 weeks, so a busy month before the injury means the payment falls, and a quiet one means it rises.
Can I work while getting ACC weekly compensation?
Yes, and it usually leaves you better off. ACC abates the payment so earnings plus compensation reach no more than 100% of your usual pay. Earning $500.00 on $1,250.00 a week drops ACC to $750.00 and puts your total back to $1,250.00.
Do I need a different tax code while on ACC?
If you are receiving compensation and earning at the same time, yes. Two income sources means one needs a secondary tax code. A main code on both is what produces an end-of-year bill.
Is this the same as the ACC levy on my payslip?
No, they are two ends of the same scheme. The earners' levy is what you pay, 1.75% of income up to $156,641. This is what it buys.
Where these figures come from
2026–27 tax year (1 April 2026 – 31 March 2027). Last verified 30 July 2026.
Related
- ACC leviesThe levy that funds this
- ACC levy calculatorWhat you pay in a year
- Secondary taxThe code you need if you also earn
- Paid Parental LeaveThe other payment taxed like a salary
- take-home pay calculatorNet pay on any gross figure