Payroll Software NZLast updated: March 2026IRD Compliance Rated

Payroll Software NZ: ACC Levy Compliance Guide 2026

How NZ payroll software handles ACC levy calculations — Employment Hero, Xero Payroll, and MYOB compared for correct ACC earners levy, employer levy, and payroll compliance.

Quick Recommendation

Employment Hero Payroll and Xero Payroll are the two best NZ payroll tools for correct ACC levy handling. Both automate employer and employee levy calculations.

Get Employment Hero Quote →Try Xero Payroll Free →

ACC levies are one of the most uniquely NZ aspects of running a business with employees. Unlike PAYE or KiwiSaver — which have clear parallels in other countries — ACC is a NZ-only system that confuses many business owners, particularly those who've moved here from overseas.

Understanding ACC Levies in NZ

There are two ACC levies relevant to NZ employers:

1. ACC Earners Levy (Employee Deduction)

The earners levy is deducted from your employees' wages, similar to PAYE. Rates for 2024/25:

Rate: $1.39 per $100 of liable earnings (as of 2024/25)
Who pays: Deducted from employee wages, remitted by employer to IRD with PAYE
Maximum liable earnings: $139,384/year (earners levy capped above this)
How it's paid: Through your payroll software along with PAYE

2. Work Account Levy (Employer Levy)

The employer levy is separate from payroll deductions and is invoiced directly to your business by ACC:

Rate: Varies by industry and business activity (higher risk = higher levy)
Who pays: Employer pays directly to ACC (not through payroll)
How it's invoiced: ACC sends an invoice annually based on your previous year's payroll
Classification: Your industry classification (ANZSIC code) affects your levy rate

How NZ Payroll Software Handles ACC

Good NZ payroll software automatically handles the earners levy (employee deduction). The employer levy is a separate ACC invoice — your payroll software should track your payroll for ACC's records, but the employer levy payment itself goes direct to ACC.

1. Employment Hero Payroll — Best Full-Featured NZ Payroll

ACC earners levy: ✅ Automatically calculated | IRD payday filing: ✅ | ACC rate updates: ✅ Automatic

Employment Hero Payroll (formerly KeyPay) handles all NZ payroll compliance including automatic ACC earners

ACC Levies Are Mandatory — Get Them Right

Incorrect ACC levy calculations create compliance risk and potential back-pay obligations. Use software that automates it correctly.

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levy calculations, KiwiSaver, and IRD payday filing. Annual ACC rate changes are updated automatically — you don't need to manually update the rates.

2. Xero Payroll — Best for Xero Users

ACC earners levy: ✅ Automatically calculated | IRD payday filing: ✅ | ACC rate updates: ✅ Automatic

Xero Payroll handles ACC earners levy deductions automatically for NZ businesses. Because it's built into Xero, payroll transactions flow directly into your accounts — no separate data entry.

3. MYOB Payroll — For MYOB Accounting Users

ACC earners levy: ✅ Automatically calculated | IRD payday filing: ✅

MYOB Business and AccountRight both handle NZ ACC earners levy correctly. Best for businesses already using MYOB for accounting.

iPayroll — NZ-Specific Cloud Payroll

iPayroll is a NZ-built cloud payroll system used by thousands of NZ businesses. Handles all NZ compliance including ACC levies, IRD payday filing, and Holidays Act leave. A solid option if you want a standalone payroll tool that's built purely for NZ.

Payroll Software Comparison: ACC & NZ Compliance

Feature	Employment Hero	Xero Payroll	MYOB	iPayroll
ACC earners levy	✅	✅	✅	✅
Auto rate updates	✅	✅	✅	✅
IRD payday filing	✅	✅	✅	✅
KiwiSaver	✅	✅	✅	✅
Holidays Act	✅	✅	✅	✅
Accounting integration	Xero/MYOB	Xero only	MYOB only	Xero/MYOB

For all NZ payroll options: Best Payroll Software NZ — IRD Compliant | For HR compliance: Best HR Software NZ — Holidays Act

Our Top NZ Payroll Picks for ACC Compliance

We earn a commission from some links — this never affects our rankings.

🥇 Employment Hero — Best for Full Compliance →🥈 Xero Payroll — Best Xero Integration →

Affiliate Disclosure: NZ Business Tools earns commissions from affiliate links on this page. This never affects our reviews or rankings — we only recommend software we believe is genuinely suitable for NZ small businesses. All NZD pricing is verified at time of publication; check provider websites for current rates.

Frequently Asked Questions

What is the ACC earners levy in NZ?

The ACC earners levy is a compulsory deduction from NZ employees' wages that funds ACC (Accident Compensation Corporation) cover for work and non-work accidents. For 2024/25, the earners levy rate is $1.39 per $100 of liable earnings. It's deducted from employee pay like PAYE.

Does payroll software automatically calculate ACC levies in NZ?

Good NZ payroll software — including Xero Payroll, Employment Hero, and MYOB — automatically calculates ACC earners levy deductions. The levy rates update annually and are built into the payroll software so you don't need to calculate manually.

What is the ACC employer levy?

In addition to the ACC earners levy deducted from employees, NZ employers pay a separate Work Account levy (employer levy) directly to ACC, not through payroll. This is invoiced by ACC directly based on your payroll and industry risk classification.

Does Xero Payroll handle ACC levies?

Yes — Xero Payroll automatically calculates and deducts the ACC earners levy from employee pay. The employer ACC levy is invoiced separately by ACC and isn't processed through Xero Payroll.

What happens if I calculate ACC incorrectly in NZ?

Incorrect ACC levy calculations can result in underpaid ACC deductions, which creates back-pay obligations. ACC can audit your payroll records. Using compliant payroll software that automatically applies the correct rates is the best way to avoid this.

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