Liable earnings are the part of your income upon which ACC levies are payable. If you are paid with PAYE deducted your liable earnings are calculated from your payroll. If you do not have PAYE deducted your liable earnings are calculated from your IR3 tax return.
Liable earnings used to calculate levies
Liable earnings is the term ACC uses to describe the part of your income upon which ACC levies are payable. When we calculate the amount of levies to pay, we base it on the earnings or income of each employee.
As a shareholder-employee the way you are paid varies. The way we determine your liable income depends on how you are paid. You may be paid through your company:
- with PAYE deduction (through the company’s payroll), or
- without PAYE deducted (but declare your income in your tax return).
Note:
If you also earn income as an employee, you are classified as a ‘Mixed Earner’ and this part of your income will also be included in your liable earnings calculation.
PAYE employees
If you are paid with PAYE deducted then your liable earnings are calculated from your company’s payroll.
Liable earnings for small medium and large businesses
Non-PAYE employees
If you are paid without PAYE deducted then your liable earnings are calculated from your most recently submitted tax return.
Liable earnings for self-employed people
Last updated: 15 December 2008