Q: Bit of an odd query (sure I am just over thinking this). In respect to the Employee ACC earner levy, certain payments such as redundancy and retirement allowances are not liable (as per https://www.legislation.govt.nz/act/public/2001/0049). However, I was a bit unsure around section 12 (https://www.legislation.govt.nz/act/public/2001/0049).
It is 100% clear that payment of any first week ACC compensation by the employer (for when the accident/injury occurs at work) is not considered as part of the gross taxable payments made on which the employer’s levy is to be based at the end of the year. However, it does not seem to specify that the payment to the employee itself should be excluded from having the earner’s levy imposed upon it (as it is not listed as an exclusion in section 11 and is details as being excluded only from the work account levy within section 12).
Are you able to confirm if the first week compensation payable to an employee should have the 1.53% earner’s levy applied as part of the PAYE deduction on this or not?
A: As it is not a separate calculation and is included in PAYE yes it does have the 1.53 earner levy applied.