The ACC earners' levy is charged on a maximum amount of income. Any amount of income earned over this maximum isn't liable for the ACC earners' levy. Despite this, for secondary tax codes the ACC earners levy is included in the PAYE calculations with no income threshold applied, ie regardless of the customer's earnings, the ACC earners levy will be deducted as part of PAYE.
The ACC earners levy will therefore continue to be deducted when the SA or, SA SL tax code is used. Even though the intention for the use of the SA or, SA SL tax code is for income of more than $180,000, this does not change the inclusion of the ACC earners levy. This approach to the deduction is required, as there is no way of assuring that all customers using the SA or, SA SL tax codes are also receiving primary income that is equal to or more than $130,211 (current ACC prescribed maximum income). As a result, some customers may receive a refund for overductions if earnings significantly exceed the ACC prescribed maximum income.
Two scenarios are provided below:
Scenario 1
Customer’s Primary income = $100,000
Customer’s Secondary income = $90,000
Total combined annual income = $190,000
Secondary tax code to use SA - Customer may receive a refund or tax bill at the end of the year.
Scenario 2
Customer’s Primary income = $200,000
Customer’s Secondary income = $100,000
Total combined annual income = $300,000
Secondary tax code to use SA - Customer may receive no or a large refund at the end of the year.
Customers who fall into one of these scenarios can apply for a tailored tax code to ensure the correct amount of tax and ACC earners levy is deducted from their income.
Our information about tax codes for individuals includes how to apply for a tailored tax code.
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