If you have more than one job or income source in New Zealand, secondary tax rules apply to prevent underpayment. Choosing the wrong code is one of the most common tax mistakes NZ workers make — here is exactly how it works.
For a second job in NZ, use a secondary tax code based on your combined income from both jobs. If your total income is $48,001–$70,000, use code SH (30%). If $70,001–$180,000, use ST (33%). Do not use tax code M for a second job — this causes underpayment and a tax bill at year end. Give the IR330 form to your second employer with the correct code.
Why Secondary Tax Exists
NZ income tax is progressive — the rate rises with income. If each job uses the main tax code (M), each employer taxes your income as if it’s your only income, starting from the lowest bracket.
The problem with using M for both jobs:
- Main job ($50,000): Taxed from $0, effective rate ~16%
- Second job ($20,000): Also taxed from $0, effective rate ~13%
- But combined ($70,000): Should be taxed at up to 30%
- Result: Significant underpayment → tax bill at year end
The secondary tax code applies a flat rate to your second income based on your expected combined income.
Which Secondary Tax Code to Use
Select the code based on your total combined income from all sources during the year:
| Combined Annual Income | Secondary Tax Code | Flat Rate Applied |
|---|---|---|
| $14,000 or less | SB | 10.5% |
| $14,001 – $48,000 | S | 17.5% |
| $48,001 – $70,000 | SH | 30.0% |
| $70,001 – $180,000 | ST | 33.0% |
| $180,001+ | SA | 39.0% |
Student loan versions: Add “SL” to the code if you’re also repaying a student loan (SB SL, S SL, SH SL, ST SL, SA SL).
How to provide the code: Complete form IR330 and give it to your second employer. Download from ird.govt.nz or complete through myIR.
Choosing Your Code: Step-by-Step
- Add up all your expected income for the year — main job, second job, and any other taxable income (not KiwiSaver, not exempt)
- Find the bracket your combined income falls in (table above)
- Use the corresponding secondary code for all jobs other than your main job
- Review each April when the tax year starts — if your situation changes, update your IR330
Example:
- Main job: $55,000 → tax code M (standard PAYE)
- Second job: $18,000 → combined income $73,000, in the $70,001–$180,000 bracket → tax code ST (33%)
Secondary Tax vs Filing an IR3
For most workers with two PAYE jobs and correct tax codes, no year-end IR3 filing is required — IRD auto-assesses and issues a refund or bill.
You must file an IR3 return if you have:
- Self-employment income (even alongside PAYE jobs)
- Rental property income
- Overseas income
- A student loan and overseas income
- Non-PAYE income exceeding $200
Even with correct secondary codes, you may receive a small refund or have a small bill due to rounding. IRD’s year-end assessment (issued by 31 May) handles this automatically.
What If You Used the Wrong Code?
Used M instead of a secondary code: You likely underpaid. IRD will issue a tax bill at year end. You can reduce the gap by making voluntary tax payments during the year through myIR.
Used too high a secondary code: You overpaid. IRD will issue a refund at year end.
If you are unsure whether you’re on the right code mid-year, use the income tax calculator at myIR to estimate your year-end position, or contact IRD on 0800 775 247.
Secondary Tax on Casual and Seasonal Work
Casual and seasonal workers often have irregular income, making it hard to predict the right code. Practical approach:
- Estimate your total income for the year (main job + casual earnings)
- Apply the appropriate secondary code
- If you overestimate, you’ll get a refund; if you underestimate, you’ll owe a small amount
Note on casual agricultural employees: There is a special tax code CAE (10.5% flat rate) for casual agricultural workers (e.g., fruit picking). Only use CAE if you meet IRD’s definition of a casual agricultural employee.
Schedular Payments (Contractors)
If you are paid as a contractor (schedular payments), the tax code WT (Withholding Tax) may apply rather than secondary codes. Common schedular payment categories:
| Payment Type | Standard WT Rate |
|---|---|
| Contractors — general | 20% |
| Contractors — no IRD number provided | 45% |
| Company contractors | 20% |
| Non-resident contractors | 15% |
If you hold a special tax rate certificate from IRD (e.g., if 20% leads to over- or underpayment), you can apply your certificate rate instead.
Frequently Asked Questions
Do I pay double tax on a second job in NZ?
No. Secondary tax codes ensure each dollar of income is taxed at approximately the right rate for your combined income level. The rate on your second job will be higher than your main job (because your combined income pushes you into a higher bracket), but you are not taxed twice on the same income.
What is the tax code for a second job earning $15,000 alongside a main job of $60,000?
Combined income: $75,000 — falls in the $70,001–$180,000 bracket. Use secondary tax code ST (33%) for the second job. Complete form IR330 and give it to the second employer.
I forgot to use the right code — what do I do?
If you used M for a second job, you have likely underpaid. At year end (31 March), IRD will assess you and issue a tax bill (due 7 February or 7 April with a tax agent). To reduce the impact, you can make voluntary payments through myIR during the year. Fix the code with your employer immediately using form IR330.
Does ACC levy apply to secondary income?
Yes. ACC earner levy (1.67%) applies to all employment income up to the annual cap ($139,892). Both jobs contribute to the cap. Once your combined PAYE income across all jobs reaches $139,892, no further ACC levy is deducted.
Does secondary tax apply to investment income?
Not through secondary tax codes. Interest, dividends, and managed fund returns (PIE income) are taxed separately — through resident withholding tax (RWT) on interest, dividend withholding tax, and PIR tax on PIE funds. These are not part of the PAYE secondary tax system.