💰 How ACC Weekly Compensation Is Calculated

PAYE employees, self-employed, and shareholder-employees — how the numbers actually work.

Up to 80% of your pre-injury average weekly earnings, before tax | Capped at ACC's maximum earnings threshold

🧭 The Basic Idea

Weekly compensation replaces up to 80% of what you were earning before your injury. But how "what you were earning" gets worked out depends entirely on your employment type — PAYE employee, self-employed, or shareholder-employee — and, for employees, how long you've been off work.

How ACC Weekly Compensation Is Calculated - ACC insider tips

👔 PAYE Employees

There are two stages:

First 4 weeks — short-term rate: based on your recent pay, giving you a quick payment while ACC gathers your full earnings history.
After 4 weeks — long-term rate: based on a fuller picture of your earnings, and it depends on whether you're a permanent or non-permanent employee.

If you're a permanent employee:

ACC totals your income from your employer over the past year and divides by the number of weeks you actually worked (up to 52). Unpaid leave weeks are excluded from the divisor — so if you had 3 weeks unpaid leave, your total earnings are divided by 49 weeks, not 52.

If you're a non-permanent employee (casual, seasonal, multiple jobs, fixed-term with under a year left, or you'd already given notice):

ACC adds up earnings from all your jobs over the past year and divides by 52 — regardless of how many weeks you actually worked. This smooths out irregular or seasonal income patterns.

Tip: If you return to part-time or reduced duties, your payment adjusts based on what you're now earning alongside ACC support. Tell ACC about any income changes straight away — this keeps your payment accurate and avoids being overpaid (which you'd have to pay back).

🧾 Self-Employed

For self-employed people, the calculation depends on how long you've been in business — this matters because ACC needs a completed tax year to use your self-employed earnings.

Newly self-employed (haven't passed your first tax year end yet):

Only your PAYE earnings from the 52 weeks before injury count — your self-employed income can't be used yet, because it hasn't been filed with Inland Revenue. If you had no PAYE income in that period, your payment could be $0 unless you qualify for a minimum rate.

Example: $23,400 earned over 18 weeks = $1,300/week average → 80% = $1,040/week before tax.

Recently self-employed (passed one tax year end):

ACC combines your declared self-employed earnings from your last tax year with any PAYE earnings in the 52 weeks before injury, then divides by the number of weeks actually worked.

Example: $40,000 self-employed over 26 weeks + $12,500 PAYE over 9 weeks are combined and divided by the weeks worked.

Established self-employed (passed two or more tax year ends):

Same combined-earnings approach as "recently self-employed," but ACC always divides by 52, regardless of how many weeks you worked that year.

Example: $35,000 self-employed + $30,000 PAYE = $65,000 ÷ 52 = $1,250/week average → 80% = $1,000/week before tax.

Important: These calculations don't apply if you hold a CoverPlus Extra policy — see below.

🏢 Shareholder-Employees

If you're a shareholder-employee (a director/owner who also works in the business), ACC generally treats your compensation similarly to a self-employed person, but based on the income declared on your IR4 company tax return rather than an individual IR3.

Your standard cover is either Workplace Cover (the default) or the optional CoverPlus Extra.
Under standard cover, if your income varies year to year (common for business owners), your weekly compensation can end up lower than expected — because it's based on last year's declared figures, not what you're earning right now.

🛡️ CoverPlus Extra (CPX) — Worth Knowing About

This is an optional policy for the self-employed and shareholder-employees that lets you agree on a fixed, guaranteed level of cover in advance, instead of ACC estimating it from last year's return.

Useful if your income fluctuates or is hard to predict.
Removes the uncertainty and delay of ACC verifying your income after an injury.
Comes at a cost — you pay a levy based on the cover level you choose, so it's a trade-off between certainty and premium.

💡 Things That Commonly Trip People Up

Weekly compensation is before tax — PAYE and other deductions apply, so your bank deposit will be less than the 80% headline figure.
If you're newly self-employed with no PAYE history, your payment can genuinely be $0 — this catches new business owners off guard.
Returning to work part-time while still on weekly compensation may mean you need a secondary tax code — check with Inland Revenue.
Filing your tax return promptly matters — ACC often needs confirmed figures from Inland Revenue to finalise your payment amount.
Not declaring other income you earn while receiving weekly compensation can be treated as fraud — always tell ACC about any income changes.

Want the exact numbers for your situation?

Call ACC's claims team: 0800 101 996
Or check your calculation via MyACC at acc.co.nz

This is general information to help you understand how calculations work — it isn't a substitute for advice from ACC about your specific claim. Rates, caps, and thresholds are reviewed and can change, so always confirm current figures with ACC or MyACC.

How ACC Weekly Compensation Is Calculated - ACC insider tips