What are PAYE and the ACC Levy?
Ultimate Salary Calculator Team
Our content is written and reviewed by finance and tax enthusiasts to ensure accuracy.
If you're an employee in New Zealand, your payslip shows deductions for PAYE. This system combines your Income Tax and the ACC Earner's Levy into a single deduction, making it simpler to manage.
What is PAYE (Pay As You Earn)?
PAYE is the system Inland Revenue (IRD) uses to collect income tax from your salary or wages. Your employer calculates the tax you owe based on your earnings and your tax code, and pays it directly to IRD. This means you don't have to worry about a big tax bill at the end of the year.
What is the ACC Earner's Levy?
The ACC Earner's Levy is a compulsory charge on your income that funds New Zealand's world-leading no-fault accident insurance scheme. If you're injured in an accident (at work, home, or playing sport), ACC can help with treatment costs and income support while you recover. The levy is collected as part of your PAYE deductions.
Example: A $65,000 Salary
Let's see these deductions in action. Here is the breakdown for someone earning $65,000 a year under the 2025-2026 tax rules, contributing 3% to KiwiSaver.
Deductions for a $65,000 Salary
Take-Home Pay (Annually)
NZ$4,187.00 per month
Gross Salary
NZ$65,000.00
NZ$5,416.67 / month
Total Deductions
NZ$14,756.00
NZ$1,229.67 / month
Taxable Income
NZ$65,000.00
All income is taxable
Effective Tax Rate
19.70%
Total deductions as % of gross salary.
Deductions Breakdown
How your gross salary is reduced.
As you can see, Income Tax is the largest deduction, followed by the ACC Levy and your KiwiSaver contribution. Our New Zealand salary calculator handles all these calculations for you automatically.