Guide to ACC and ESCT rates

Managing payroll in New Zealand involves more than just wages and salaries – you’ve got to factor in additional costs and taxes with every pay run. Two of those are the Accident Compensation Corporation (ACC) levies and the Employer Superannuation Contribution Tax (ESCT). Getting these right is critical for compliance and for maintaining trust with your team.

Our guide breaks down what you need to know about these two expenses to stay compliant and manage your contributions effectively.

Download our quick reference guide by filling in the form on the right. 

What is ESCT (Employer Superannuation Contribution Tax)?

ESCT is the tax paid on cash contributions that an employer makes to an employee’s superannuation fund, like KiwiSaver or complying funds. It is important to remember this tax applies to the employer’s contribution, not the employee’s own deductions from their salary. The legal basis for this is outlined in the Income Tax Act 2007. It ensures that employer contributions are taxed consistently as a form of employee remuneration.

How ESCT rates and thresholds work

The correct ESCT rate for an employee is determined by their total earnings. This is calculated based on the employee’s gross salary or wages, plus the gross amount of your employer contributions from the previous financial year. For new employees, you must estimate their likely annual income to set the initial rate.

ESCT thresholds from 1 April 2025

From 1 April 2025, the personal income tax thresholds have been adjusted. The ESCT thresholds have been updated to align with these changes. This means some of your employees may now fall into a different tax bracket for their ESCT.

Here are the new thresholds:

Annual total (salary + super)	ESCT rate
$0 to $16,800	10.5%
$16,801 to $64,200	17.5%
$64,201 to $93,720	30%
$93,721 to $216,000	33%
$216,001 and over	39%

Previous ESCT threshold structure (pre-1 April 2025)

For historical context, it can be useful to see the previous thresholds. Before 1 April 2025, the ESCT rates were aligned with the personal income tax brackets, so the annual ranges are a little different. This structure was in place for several years.

The ESCT rates were previously set as follows:

Annual total (salary + super)	ESCT rate
$0 to $16,800	10.5%
$16,801 to $57,600	17.5%
$57,601 to $84,000	30%
$84,001 to $216,000	33%
$216,001 and over	39%

What the recent changes mean for employers

The main impact of the changes is that the income bands for the 17.5% and 30% rates have been extended. This may mean some employees who were previously in a higher ESCT bracket will move to a lower one. 

As a result, the net amount of your contribution that lands in their KiwiSaver account could increase. For employers, this change is primarily an administrative one, requiring you to ensure your payroll system is updated to apply the correct rates.

How to calculate ESCT for each employee

Calculating ESCT can be broken down into a straightforward process.

First, determine the employee’s correct threshold by adding their gross salary and your employer contributions from the previous year. Next, select the corresponding ESCT rate from the threshold table. Apply this rate to the cash contribution you make each payday. Finally, report the deducted ESCT amount to Inland Revenue as part of your regular payday filing.

Compliance and practical tips for employers

Staying on top of ESCT is a matter of good process. It is best practice to review all employee ESCT rates at the beginning of each tax year around 1 April. This ensures any salary changes from the previous year are accounted for.

Make sure your payroll software is updated with the new thresholds too. For businesses with many employees, doing a bulk update at the start of the tax year is the most efficient approach. Always document how you have determined each employee’s rate and regularly check for any under or over deductions, especially for employees with variable income.

How Employment Hero helps with ESCT management

Managing ESCT changes and calculations doesn’t need to be a manual headache. Employment Hero’s payroll platform automates the process with the latest tax thresholds from Inland Revenue, so you can have changed rates applied straight away. 

You can also generate reports to audit your contributions. Plus, our platform enables you to complete payday filing in a few clicks, including recording any ESCT deductions. 

The information in this article is current as at 30 November 2025, and has been prepared by Employment Hero Pty Ltd (ABN 11 160 047 709) and its related bodies corporate (Employment Hero). The views expressed in this article are general information only, are provided in good faith to assist employers and their employees, and should not be relied on as professional advice. Some information is based on data supplied by third parties. While such data is believed to be accurate, it has not been independently verified and no warranties are given that it is complete, accurate, up to date or fit for the purpose for which it is required. Employment Hero does not accept responsibility for any inaccuracy in such data and is not liable for any loss or damages arising directly or indirectly as a result of reliance on, use of or inability to use any information provided in this article. You should undertake your own research and seek professional advice before making any decisions or relying on the information in this article.