ACC Weekly Compensation: How the 80% Works
🩺 What is weekly compensation?
Weekly compensation is the income ACC pays you when an injury stops you from working. New Zealand's accident compensation scheme covers everyone, whether the injury happened at work, at home, on the sports field or on the road, and in return you cannot generally sue for personal injury. If your injury leaves you unable to do your job, ACC steps in and replaces most of your lost income while you recover. The headline rule is simple: ACC pays up to 80% of your average weekly earnings before the injury. The detail is where people get caught out, because the first week is treated differently depending on whether the injury was at work, there is a stand-down before payments begin, the amount is capped at both a minimum and a maximum, and the payment is taxed just like ordinary wages. This guide walks through how your earnings are assessed for employees and the self-employed, what you actually receive after the caps and tax, and the practical steps, medical certificates and abatement rules that keep the payments flowing. The dollar figures below are the current New Zealand rates verified against ACC in July 2026.
Who weekly compensation is for
You can receive weekly compensation if you are an earner (an employee or self-employed person) who was earning at the time of your injury and the injury means you cannot work, or cannot work as much as you did. It is not a payment for the injury itself: separate ACC entitlements cover treatment costs and, for lasting impairment, lump sums. Weekly compensation specifically replaces the wages or self-employed income you lose while you are off work.
You do not need a private policy. Everyone in paid work contributes to ACC through the earners' levy collected in PAYE, and self-employed people pay levies on their earnings. That levy funds weekly compensation, so the cover is already in place the moment you are injured.
What this guide covers
- The 80% rule and how your pre-injury earnings are worked out
- The first week for work injuries and the stand-down for other injuries
- How employees and self-employed people are assessed differently
- The minimum and maximum weekly payments and the earnings cap
- Tax, abatement when you return to work, and medical certificates
📐 The 80% rule and the first week
Weekly compensation is built on one core figure: 80% of your average weekly earnings before you were injured. Getting from your old pay to your ACC payment involves the first-week rules, a stand-down, and the way ACC assesses your earnings.
The 80% replacement rate
ACC pays 80% of your pre-injury average weekly earnings, not 100%. The 20% gap is deliberate and applies to almost everyone. If you earned $1,000 a week before your injury, your weekly compensation is $800 gross, before tax is deducted. The figure is gross, so PAYE and any other deductions still come off it.
The first week
| Injury type | Who pays the first week | What you get |
|---|---|---|
| Work injury | Your employer | 80% of your usual pay for the first week |
| Non-work injury | No one is required to | You use sick or annual leave, or go without |
If your injury happened at work, your employer must pay you 80% of your usual pay for the first week off. ACC then takes over from the second week. If the injury happened away from work, no employer payment is required for the first week, so most people use sick leave or annual leave to cover it.
The stand-down (day 8)
ACC weekly compensation does not start on day one. You usually become eligible on day 8 after your injury, so there is effectively a one-week stand-down before ACC payments begin. For a work injury that first week is bridged by your employer's 80% payment. For other injuries it is bridged by your own leave. After day 8, ACC pays for as long as you remain unable to work and keep providing medical certificates.
The only real difference in the first week is who pays. A work injury gets you an employer-funded 80% first week. A non-work injury does not, so you rely on leave until ACC starts on day 8. From day 8 onward, both are paid by ACC at 80% under the same rules.
How earnings are assessed for employees
ACC uses two methods depending on how long you are off work:
- Short-term rate (first four weeks): based on what you actually earned in the four weeks immediately before the injury. This captures your recent pay, including regular overtime.
- Long-term rate (after four weeks): for permanent employees, your earnings over a longer period are divided by the weeks you worked, up to 52 weeks, to smooth out ups and downs. For non-permanent or seasonal workers, earnings are generally divided across 52 weeks.
How earnings are assessed for the self-employed
Self-employed people are covered too, but the assessment differs:
- Standard CoverPlus: your weekly compensation is based on the earnings shown in your most recently filed income tax return, then paid at 80%. Filing your returns matters, because a low or missing return means a low assessment.
- CoverPlus Extra: you agree a set level of cover with ACC in advance. If you are injured, ACC pays 100% of that agreed amount, not 80%, and you do not have to prove your lost earnings. This gives certainty, which suits business owners with variable or hard-to-prove income.
Under standard CoverPlus your payment reflects your last tax return. If you have not filed, or your return understates a good year, your weekly compensation can be far below what you actually earn. CoverPlus Extra removes that risk by fixing the amount ahead of time.
💵 Minimums, maximums, tax and abatement
The 80% figure is trimmed at both ends. There is a floor so low earners are not left with almost nothing, and a ceiling so the scheme does not pay very high earners in full. On top of that, the payment is taxed and can be reduced if you return to work part-time.
The minimum weekly compensation
Full-time earners have a minimum weekly compensation so the 80% rule cannot drop them below a set floor. From 1 April 2026 the gross minimum for a full-time earner is $766.40 a week, which is 80% of the adult minimum wage of $958.00 for a 40-hour week. The previous minimum, from 1 April 2025, was $752.00. The minimum is indexed to the minimum wage and updates each 1 April.
The maximum weekly compensation
There is also a ceiling. From 1 July 2026 the gross maximum weekly compensation is $2,466.20 a week, up 1.97% from the previous $2,418.55. This maximum is indexed to the Labour Cost Index and rises each 1 July. Once your 80% payment would exceed this figure, you are capped at the maximum regardless of how much you used to earn.
The maximum liable earnings cap
ACC only counts your earnings up to a maximum liable earnings figure. For the 2026/27 year that cap is $156,641 (up from $152,790 in 2025/26). This is the same ceiling used for the earners' levy you pay through PAYE, currently 1.75%, giving a maximum earners' levy of $2,741.22 a year.
The maximum liable earnings ($156,641) is the cap on the income ACC counts and levies. The maximum weekly compensation ($2,466.20 gross a week) is the cap on what ACC actually pays. They are set and indexed under different rules, so you cannot derive one exactly from the other. The practical effect is the same: above a high income, extra earnings do not increase your payment, and top earners receive well under 80% of what they used to take home.
Tax on weekly compensation
Weekly compensation is taxable income. ACC deducts PAYE using your tax code before paying you, exactly like an employer would. Other deductions can also apply, including student loan repayments, KiwiSaver contributions and child support. The dollar figures above are all gross, so your bank deposit will be lower once tax and any deductions come off.
Abatement when you return to work
If you go back to work part-time while still recovering, ACC reduces (abates) your weekly compensation so your combined income does not exceed your usual pre-injury pay. This lets you ease back into work without losing out, but it also means your ACC payment shrinks as your earned income rises.
Medical certificates
Your entitlement depends on medical evidence. To start weekly compensation you need a medical certificate confirming your injury stops you working, and you must keep providing updated certificates for payments to continue. When your certificate clears you as fit for work, or fit for more hours, your payments stop or reduce accordingly.
Payments can pause if a certificate lapses. Book follow-up appointments before your current certificate expires, and give ACC the new one promptly, so there is no gap in your income while you recover.
🔢 Real-World Examples
These examples show how weekly compensation works in practice, using the current New Zealand rates. All figures are gross, before PAYE.
Situation: Hemi earns $70,000 a year and hurts his back lifting stock at work. He is off work for six weeks.
Situation: Priya earns $52,000 and breaks her wrist skiing on the weekend. It is not a work injury, so the first week is on her.
If Priya's injury had happened at work, her employer would have paid 80% for week one. Because it happened while skiing, she covers the first week with leave, then ACC pays 80% from day 8. From that point the rules are identical to a work injury.
Situation: Jack earns $220,000 a year and is seriously injured in a car crash. His 80% entitlement is well above the maximum, so the cap applies.
Because of the maximum, Jack receives about 58% of his usual income, not 80%. Higher earners who want to protect the gap above the ACC cap sometimes take out private income protection insurance to top up.
Situation: Tania is a self-employed builder. Her income swings year to year, so she holds CoverPlus Extra with an agreed cover of $80,000. She injures her shoulder and cannot work.
Under CoverPlus Extra, Tania is paid 100% of her agreed $80,000, with no need to prove earnings from a tax return. That certainty is why many self-employed people with fluctuating income choose it, even though the levies for higher agreed cover cost more. PAYE still applies to the payments.
Sources
Figures were verified against ACC (acc.co.nz): "Weekly compensation for employees", "Weekly compensation for self-employed", "Changes to client payments from 1 April 2026" and "Changes to ACC client payments from 1 July 2026". Current rates: minimum $766.40 gross a week (from 1 April 2026, being 80% of the $958.00 minimum wage for 40 hours); maximum $2,466.20 gross a week (from 1 July 2026); maximum liable earnings $156,641 for 2026/27 with an earners' levy of 1.75%. ACC pays 80% of pre-injury earnings, employers pay the first week for work injuries, eligibility usually starts day 8, and CoverPlus Extra pays 100% of an agreed amount. Always confirm current figures and your own entitlement directly with ACC.
Related tools and guides
- ACC Weekly Compensation Calculator - estimate your weekly payment from your earnings.
- Take-Home Pay Calculator - see your net pay after PAYE and deductions.
- ACC CoverPlus Extra Calculator - model an agreed level of cover if you are self-employed.
- Depositor Compensation Scheme, a related guide in the same area.
🎯 Test Your Knowledge
Complete this 10-question quiz to check your understanding of ACC weekly compensation
Situations like yours. The 4 situations worked through above sit alongside 16 more about illness, injury and health costs, each with the sums shown.