ACC Weekly Compensation Cap 2026 (NZ): The $2,418 Ceiling for High Earners

ACC caps weekly compensation at $2,418.55 from 1 July 2025. Above roughly $157,000 of income, even a covered accident leaves a high earner short. Here is the income band where it bites, and how to close it.

Most New Zealanders assume ACC has them covered for accidents. It does, up to a point. The phrase that does the heavy lifting is "up to a point." The ACC weekly compensation cap (NZ) pays 80% of your pre-injury earnings, but only on income beneath a hard ceiling. Earn above that ceiling and even a textbook accident claim leaves you materially short, on top of the 20% ACC was never going to replace.

This guide shows you the exact dollar figure of the cap for 2025/26, the income band where it starts to bite, and how income protection is built to top up precisely that shortfall.

TL;DR: From 1 July 2025, ACC's maximum weekly compensation is $2,418.55 gross ¹. ACC replaces 80% of pre-injury earnings ², so once your salary clears roughly $157,000, the cap freezes your payout, and every extra dollar you earn is uninsured by ACC. Above the cap, your effective replacement rate falls well below 80%, even for accidents.

How is ACC weekly compensation calculated in 2025/26?

If a personal injury caused by an accident stops you working, ACC pays weekly compensation at 80% of your pre-injury gross weekly earnings ². Two things sit on top of that 80%:

• A one-week stand-down — you receive nothing from ACC for the first seven days ⁵.
• A maximum weekly compensation cap — a dollar ceiling on the gross payment, no matter how much you earned ¹.

The payment is gross and taxable, taxed at source like a salary. So the headline "80%" is 80% of your gross income before the cap is applied, and you still pay PAYE on what lands.

Here are the parameters for the year from 1 July 2025:

The minimum exists because ACC floors a full-time earner's payment at 80% of the adult minimum wage of $23.50/hr at 40 hours — that is 80% of $940 = $752 ⁴. The maximum is the figure that quietly does the damage to high earners.

What is the ACC maximum weekly compensation rate right now?

The number to memorise is $2,418.55 per week, gross, effective 1 July 2025 ¹.

Annualised, that is $2,418.55 × 52 = $125,764.60 per year of gross compensation, and that is the most ACC will ever pay you in weekly comp, regardless of whether you earned $160,000 or $600,000 before your accident.

Because the cap is the 80% payout, you can work backwards to the income it corresponds to: $125,764.60 ÷ 0.80 = roughly $157,200 of pre-injury income. That is purely a back-calculation from the weekly cap — it is the income level at which an 80% replacement would equal $2,418.55/week, so any income above it is simply outside what ACC weekly comp will pay. (Note this is a different figure from ACC's published maximum liable earnings of $152,790 for 2025/26 ³, which is the income ceiling ACC charges the Earners' Levy on; the two numbers are set under different rules and should not be conflated.)

At what salary does the ACC cap start leaving you short?

Below roughly $157,000, the only gap is the standard 20% ACC never replaces. Above it, a second gap opens up and widens fast, because your payout is frozen at $125,764.60 while your income keeps climbing.

The figure below targets an 80% income-replacement goal (the level ACC itself aims at) and compares it to what ACC actually pays once the cap applies.

Figure: ACC income shortfall by salary band (1 July 2025 cap)

_Source: ACC 2025/26 maximum weekly compensation $2,418.55, annualised over 52 weeks ¹; 80% replacement rule ²._

A $200,000 earner who assumed ACC had them on 80% is actually capped at $125,764.60 — about 63% of gross income (62.9%), even for a covered accident. To be clear, that 63% is the capped payout measured against gross income, so the missing 20% is already baked into it, not an additional deduction; tax then applies to what lands, as it would to salary. That is a shortfall of more than $34,000 a year at the point the person cannot work.

This commonly affects specialist contractors, senior clinicians, and self-employed tradespeople with high earnings, who are covered by ACC but not for as much income as they assume.

Does ACC have a stand-down period for accidents, and what fills it?

Before the cap even enters the picture, there is the first week. ACC weekly compensation is payable from day 8 after the date of first incapacity ⁵. For the first seven days, the obligation falls on your employer, who pays the first week at 80% of your expected earnings ⁵.

That works cleanly if you are a salaried employee. It works far less cleanly if you are:

• Self-employed or a contractor — there is no employer to cover week one, so the stand-down is yours to wear.
• A high earner — your employer's first-week payment is still pegged to 80%, and your own fixed costs (mortgage, drawings, staff wages) do not pause for a week.

An income protection policy with a short waiting period, or a mortgage-protection product, can be structured to start covering early, but most income protection policies use waiting periods of 4, 8 or 13 weeks to keep premiums affordable. That is a deliberate trade-off, not an oversight. It also means an emergency fund covering the first month or two is part of a sensible plan, not a substitute for cover.

How does income protection top up the ACC shortfall?

Income protection insurance is the tool built to fill exactly the two gaps above: the 20% ACC never replaces, and the uncapped income that ACC ignores entirely. Unlike ACC, an income protection policy insures your actual income, not a government-set ceiling, so a $200,000 earner can insure up to 75% of that figure rather than being frozen at $125,764.60.

The claims data backs up why this matters beyond accidents. AIA New Zealand paid $790 million in total claims in 2025, accepting 91% of them ⁷; $108.69 million of that was income protection alone ⁶. The leading causes of AIA's income protection claims in 2025 were musculoskeletal (31%), mental health (23%), neurological (15%) and cancer (12%) — and three of those four are illnesses ACC does not touch.

One mechanical point trips people up, so it is worth being precise: most income protection benefits are offset against ACC. AIA, for example, deducts ACC and WINZ payments from Agreed Value, Indemnity, and Loss of Earnings income protection benefits ⁸¹⁴. That is by design. For an accident where ACC pays, your income protection policy tops up the shortfall above what ACC delivers; for an illness where ACC pays nothing, the policy carries the full benefit. By contrast, AIA's Mortgage/Income/Rent Cover has no ACC or WINZ offset on the first $7,500/month ⁸ — useful where you want a guaranteed payment that does not shrink when ACC pays.

These offset rules and benefit-type definitions are AIA's. They are not universal: how the ACC offset works, and how Agreed Value, Indemnity and Loss of Earnings are defined and priced, varies across insurers. Because we are independent, Smiths compares the offset treatment and benefit-type wording across every major NZ provider — Partners Life, Fidelity Life, Asteron Life, Chubb and Cigna among them — rather than fitting you to one company's rulebook. We use AIA's figures here only because their Claims Compass data is published in detail.

Agreed value vs indemnity interaction

How your benefit is calculated decides how much certainty you actually have when you claim. AIA offers three approaches ¹⁴:

For the high earners most exposed to the ACC cap, the distinction is not academic. A self-employed earner on Indemnity who has a slow year before claiming can find their benefit assessed on that softer income. Agreed Value or Loss of Earnings removes that risk. This is exactly the kind of trade-off our income protection calculator is built to surface before you lock anything in.

What happens to your KiwiSaver while you are on ACC?

A stretch off work quietly damages your retirement savings too, and almost nobody factors this in. ACC weekly compensation is not salary, so your employer KiwiSaver contributions stop, and unless you arrange to keep contributing, so do yours. Two 2025/26 settings make this sting more than it used to:

• The KiwiSaver government contribution was halved from 1 July 2025 — the match dropped from 50c to 25c per $1, and the annual maximum fell from $521.43 to $260.72 ¹⁰. To get the full $260.72 you still need to personally contribute $1,042.86 between 1 July and 30 June ⁹.
• If your annual taxable income is over $180,000, you now receive no government contribution at all ¹¹ — a band that overlaps heavily with the high earners caught by the ACC cap.

Default contribution rates are also rising under Budget 2025: 3% now, 3.5% from 1 April 2026, and 4% from 1 April 2028 ¹². A long claim period can mean you miss the contribution window and the government top-up for that year entirely. A quick KiwiSaver review before anything goes wrong lets us set a plan to keep your contributions ticking over if income stops — across providers such as Booster, Milford and Simplicity — and check your PIR is right while we are there (10.5% / 17.5% / 28% at the $15,600 / $53,500 / $78,100 thresholds ¹³).

Your checklist: closing the high-earner income gap

01. Know your number. If you earn over ~$157,000, ACC's maximum weekly comp of $2,418.55 ¹ caps your payout at $125,764.60/year — work out your shortfall against 80% of your actual income.

02. Confirm your benefit type. Agreed Value or Loss of Earnings gives certainty; Indemnity can pay less if your income dips before you claim ¹⁴.

03. Set the right waiting period. Match it to your emergency fund and the one-week ACC stand-down ⁵ — 4, 8 or 13 weeks changes your premium materially.

04. Understand the ACC offset. Income protection tops up above ACC for accidents and carries the full load for illness ⁸; mortgage-type cover can sit outside the offset on the first $7,500/month ⁸.

05. Protect your KiwiSaver. Plan how contributions continue if income stops, and bank the (now smaller) $260.72 government contribution ¹⁰ each year.

06. Review annually. Incomes, the cap, and KiwiSaver rules all move — a yearly check keeps your cover matched to reality.

Next steps

The ACC cap is easy to miss until you need to claim, and for a high earner it can mean a shortfall of more than $34,000 a year. A review can map where ACC stops and where your real income gap begins.

Book a free review with a Smiths adviser. Book a review

Frequently asked questions

What is the ACC maximum weekly compensation rate in 2025/26? From 1 July 2025, ACC's maximum gross weekly compensation is $2,418.55 ¹. Annualised, that caps the payout at $125,764.60 per year, no matter how much you earned before your injury.

At what income does the ACC cap start leaving me short? Because ACC pays 80% of pre-injury earnings ² and the cap is $2,418.55/week ¹, the cap begins to bite once your income clears roughly $157,000 — the income level at which 80% would equal the weekly cap ($125,764.60 ÷ 0.80). Below that, your only gap is the standard 20%.

Does ACC really pay nothing for the first week, even for an accident? ACC weekly compensation starts on day 8 ⁵. For employees, the employer covers the first week at 80% of expected earnings ⁵. Self-employed people generally have no employer top-up, so the one-week stand-down falls on them.

Will my income protection pay on top of ACC? Usually not on a dollar-for-dollar basis. Insurers such as AIA offset ACC and WINZ payments against income protection benefits ⁸, so the policy tops up the shortfall above ACC for accidents and pays the full benefit for illness. Offset rules vary by insurer, which is why we compare them across providers. Some mortgage-protection products have no offset on the first $7,500/month ⁸.

What happens to my KiwiSaver while I'm on ACC? ACC weekly compensation is not salary, so employer and employee KiwiSaver contributions usually stop. From 1 July 2025 the maximum government contribution is $260.72, requiring $1,042.86 of personal contributions ⁹¹⁰, and earners over $180,000 receive none ¹¹. Plan to keep contributing through a claim.

Is the ACC cap the only income gap I should worry about? No. There are three stacked gaps: the 20% ACC never replaces, the income above the cap, and the fact that ACC pays nothing for illness at all. For higher earners, all three can apply at once.

General information, not personalised financial advice. Seek advice tailored to your situation before acting. Craig Smith Business Services Ltd (FSP712931), trading as Smiths Financial, holds a Class 2 licence issued by the Financial Markets Authority and is a member of the Financial Dispute Resolution Service (FDRS). Written by Henry Smith, Financial Adviser; reviewed by Craig Smith, Principal Adviser. Last reviewed 16 June 2026.