Published: May 12, 2026

NZ Tax Codes Explained: M, ME, S & Secondary Tax Codes In New Zealand (2026 Guide)

Quick Answer

NZ tax codes help Inland Revenue (IRD) determine how much PAYE tax should be deducted from your wages, salary, pension, or benefits in New Zealand. Common tax codes include M, ME, S, SH, and ST. Using the wrong tax code may lead to overpaying tax, underpaying IRD, reduced refunds, or unexpected tax bills later.

What Are NZ Tax Codes?

Tax codes are combinations of letters used by employers and Inland Revenue (IRD) to calculate tax deductions from income.

Your NZ tax code affects:

• PAYE tax deductions
• ACC levies
• student loan repayments
• KiwiSaver deductions
• secondary income tax rates

Official IRD guidance: Inland Revenue New Zealand

Updated for the 2026–2027 New Zealand Tax Year: This guide has been reviewed to reflect the latest Inland Revenue (IRD) guidance on New Zealand tax codes. Whether you’re starting a new job, working multiple jobs, repaying a student loan, or changing your employment status, this resource will help you choose the correct tax code and avoid paying the wrong amount of PAYE tax.

Choosing the right tax code is essential because it determines how much PAYE tax your employer deducts from your wages or salary. Using the wrong tax code may result in underpaying or overpaying tax throughout the year. Fortunately, correcting your tax code is simple once you understand how each code works.

Table of Contents

• NZ Tax Code Chart
• ST Tax Code NZ
• SH Tax Code NZ
• MSL Tax Code NZ
• MESL Tax Code NZ
• S Tax Code NZ
• M Tax Code NZ
• ME Tax Code NZ
• IR330 Tax Code Declaration Form
• When Should You Change Your Tax Code?
• Common Tax Code Mistakes
• Frequently Asked Questions

NZ Tax Code Chart (2026)

The table below summarises the most commonly used New Zealand tax codes. Your correct tax code depends on whether the income is your main source of earnings, whether you have a student loan, and whether you qualify for specific tax credits.

Tip: If you’re unsure which tax code applies to your situation, seek professional advice before completing your IR330 Tax Code Declaration Form.

ST Tax Code NZ Explained

ST is a secondary income tax code used when you earn income from a second job and your total annual income places you within the applicable PAYE threshold for the ST rate. It helps ensure that enough tax is deducted from your secondary income during the year.

Who should use the ST tax code?

• Employees with a second job.
• Workers whose main employment already uses another tax code.
• Individuals whose combined annual income falls within the IRD threshold requiring the ST code.

Example

Emma works full-time during the week and earns additional income from weekend hospitality work. Her primary employer uses the M tax code, while her weekend employer applies the ST tax code based on her combined annual income.

Common mistakes

• Using ST for a main job instead of secondary employment.
• Not updating the tax code after changing jobs.
• Selecting the wrong secondary tax code based on estimated annual income.

Using the wrong secondary tax code may result in paying too much or too little PAYE tax during the year.

SH Tax Code NZ Explained

The SH tax code is another secondary income tax code. It applies when your total annual income from all jobs falls within a higher income bracket than those using the S tax code.

When is SH used?

• You already have a main employer.
• You start a second job.
• Your total annual income places you in the SH threshold.

Example

James earns a salary from his weekday office role and teaches fitness classes in the evenings. His evening employer may need to use the SH tax code depending on his combined yearly earnings.

Why choosing the correct code matters

Choosing SH instead of another secondary tax code ensures PAYE deductions more accurately reflect your total taxable income, reducing the likelihood of an unexpected tax bill.

MSL Tax Code NZ Explained

The MSL tax code applies to employees whose main source of income is subject to student loan repayments. The letters “SL” indicate that compulsory student loan deductions are made alongside PAYE.

You may need the MSL tax code if:

• Your main employer is your primary source of income.
• You have an outstanding New Zealand student loan.
• IRD has not instructed you to use another tax code.

Example

Olivia has recently graduated and works full-time. Because she has an outstanding student loan, her employer applies the MSL tax code so both PAYE tax and student loan repayments are deducted automatically.

Important reminder

If your student loan has been fully repaid, you should update your tax code promptly to prevent unnecessary deductions from your salary.

MESL Tax Code NZ Explained

The MESL tax code combines the benefits of the ME tax code with compulsory student loan repayments. It is generally used when your main source of income qualifies for the Independent Earner Tax Credit (IETC) and you are also repaying a student loan.

MESL may apply if you:

• Have one main employer.
• Meet the eligibility criteria for the Independent Earner Tax Credit.
• Have an outstanding student loan.

Example

Sarah works full-time, qualifies for the Independent Earner Tax Credit, and is still repaying her student loan. Her employer deducts PAYE using the MESL tax code.

Review your tax code regularly

Your tax code may need updating if your income changes, your student loan is repaid, or your employment circumstances change. Reviewing your tax code each time you start a new job helps ensure the correct amount of PAYE is deducted.

NZ Tax Codes Explained For Employees, Freelancers & Multiple Jobs

Using The Wrong Tax Code Can Cause Problems

Incorrect NZ tax codes may result in:

• paying too much tax
• underpaying IRD
• unexpected tax bills
• smaller refunds
• reduced take-home pay

Many people accidentally choose the wrong tax code when:

• starting a new job
• working multiple jobs
• moving to New Zealand
• earning freelance income
• receiving benefits

M Tax Code Explained

The M tax code is one of the most common tax codes in New Zealand. It is usually used for your main source of income.

ME Tax Code Explained

The ME tax code may apply to lower-income earners who qualify for the independent earner tax credit.

S Tax Code Explained

The S tax code is commonly used for secondary income or second jobs.

SH Tax Code Explained

The SH tax code may apply to higher secondary income earners depending on total income levels.

ST Tax Code Explained

The ST tax code may apply if an employee has not completed a tax code declaration form.

NZ Tax Codes For Multiple Jobs

People with multiple jobs, side hustles, freelance work, or online income may require different tax codes for different income sources.

Related: Side Hustle Tax NZ

How To Choose The Correct NZ Tax Code

Main Income Vs Secondary Income

Your main source of income usually uses:

• M tax code
• ME tax code

Secondary income often uses:

• S tax code
• SH tax code
• ST tax code

What Happens If You Use The Wrong Tax Code?

Using the wrong NZ tax code may lead to:

• underpaid tax
• IRD debt
• unexpected tax payments
• refund delays
• compliance notices

Related: IRD Penalties And Interest Explained

Why NZ Tax Codes Explained Matters In 2026

Understanding NZ Tax Codes Explained is important for employees, freelancers, contractors, and business owners across New Zealand. Many taxpayers use incorrect tax codes without realising it, which may lead to overpaying tax or receiving unexpected IRD bills later.

As more people manage multiple jobs, side hustles, and freelance income, searches for NZ Tax Codes Explained continue increasing across New Zealand. Choosing the correct PAYE tax code can help avoid compliance problems and improve tax accuracy.

This NZ Tax Codes Explained guide helps New Zealand taxpayers understand common IRD tax codes such as M, ME, S, SH, and ST, along with how secondary income tax works in NZ.

Can You Change Your NZ Tax Code?

Yes — employees can update their tax code by:

• contacting their employer
• updating details through myIR
• submitting a new tax code declaration

Related: myIR Login NZ Guide

S Tax Code NZ Explained

The S tax code is used for secondary income. If you already have a main job and start another job or receive additional employment income, your second employer may use the S tax code depending on your estimated total annual income.

Using the correct secondary tax code helps ensure the right amount of PAYE tax is deducted throughout the year and reduces the likelihood of receiving an unexpected tax bill or refund after filing your tax return.

Who should use the S tax code?

• You have a primary employer using the M, ME, MSL or MESL tax code.
• You begin a second job or earn additional employment income.
• Your estimated annual income falls within the IRD threshold for the S tax code.

Example

David works full-time as an engineer and earns additional weekend income as a cricket coach. His main employer uses the M tax code, while his coaching employer applies the S tax code based on his estimated annual earnings.

M Tax Code NZ Explained

The M tax code is the most commonly used tax code in New Zealand. It applies when your employment is your main or only source of income and you are not required to make student loan repayments.

You should generally use the M tax code if:

• You have one full-time or part-time employer.
• This is your primary source of income.
• You do not qualify for another specific tax code.
• You are not repaying a New Zealand student loan.

Benefits of using the correct M tax code

• Accurate PAYE deductions.
• Reduced risk of overpaying or underpaying tax.
• Simpler year-end tax reconciliation.

Example

Emma starts her first full-time office job after university. She has no student loan and no second job. Her employer correctly applies the M tax code.

ME Tax Code NZ Explained

The ME tax code is designed for employees whose main source of income qualifies for the Independent Earner Tax Credit (IETC). It allows eligible employees to receive the tax credit through their PAYE deductions instead of waiting until the end of the tax year.

You may qualify for the ME tax code if:

• Your employment is your main source of income.
• You meet Inland Revenue’s eligibility criteria for the Independent Earner Tax Credit.
• You do not have an outstanding student loan requiring MSL or MESL.

Example

Rachel works full-time and meets the income requirements for the Independent Earner Tax Credit. Her employer applies the ME tax code, allowing the tax credit to be reflected in her PAYE deductions.

If your circumstances change during the year, you should review whether the ME tax code is still appropriate.

IR330 Tax Code Declaration Form

The IR330 Tax Code Declaration Form is the official Inland Revenue form used by employees to tell their employer which tax code should be applied to their wages or salary.

Most employers will ask you to complete an IR330 form before your first payday.

When should you complete an IR330 form?

• Starting a new job.
• Changing employers.
• Beginning a second job.
• Repaying or finishing a student loan.
• Your tax code changes because of your circumstances.

Information you’ll need

• Your IRD number.
• Your employment details.
• Your main source of income.
• Student loan status.
• Your chosen tax code.

Providing accurate information helps your employer deduct the correct amount of PAYE tax from your wages.

When Should You Change Your Tax Code?

Your tax code is not something you choose once and forget. It should be reviewed whenever your employment or financial circumstances change.

You should update your tax code if you:

• Start a new job.
• Take on a second job.
• Leave a job.
• Receive a salary increase that changes your tax bracket.
• Begin repaying a student loan.
• Finish repaying your student loan.
• Become eligible for the Independent Earner Tax Credit.
• Stop qualifying for the Independent Earner Tax Credit.
• Begin receiving New Zealand Superannuation.
• Return to work after parental leave.

Keeping your tax code up to date helps ensure you pay the correct amount of PAYE tax throughout the year.

Common Tax Code Mistakes to Avoid

Many employees accidentally use the wrong tax code. Although Inland Revenue can often correct discrepancies later, using the correct code from the beginning helps avoid unnecessary complications.

1. Using the M tax code for a second job

Your second employer will usually need to apply an appropriate secondary tax code rather than the M tax code.

2. Forgetting to update your tax code after repaying your student loan

If your student loan has been fully repaid, continuing to use MSL or MESL could result in unnecessary deductions.

3. Selecting the wrong secondary income tax code

Your secondary tax code depends on your combined annual income from all employment. Choosing the wrong one may lead to underpaid or overpaid tax.

4. Not submitting a new IR330 form

Whenever your tax code changes, provide your employer with an updated IR330 Tax Code Declaration Form as soon as possible.

5. Assuming your employer will automatically update your tax code

Employers generally rely on the information you provide. If your circumstances change, it is your responsibility to notify your employer and complete a new tax code declaration if required.

Real-Life Tax Code Examples

Choosing the correct tax code can sometimes be confusing. The examples below illustrate common employment situations and the tax code that may apply. These examples are for general guidance only and individual circumstances may differ.

Example 1: One Full-Time Job

Situation: Liam works full-time for one employer and does not have a student loan.

Likely Tax Code: M

Example 2: Full-Time Job with a Student Loan

Situation: Sophie has one full-time employer and is repaying her New Zealand student loan.

Likely Tax Code: MSL

Example 3: Two Jobs

Situation: Ethan works Monday to Friday as an accountant and teaches swimming on weekends.

• Main employer: M
• Second employer: Appropriate secondary tax code (such as S, SH, ST or SA depending on total annual income).

Example 4: Eligible for the Independent Earner Tax Credit

Situation: Chloe has one employer, meets the eligibility criteria for the Independent Earner Tax Credit (IETC), and does not have a student loan.

Likely Tax Code: ME

Example 5: IETC and Student Loan

Situation: Jack qualifies for the Independent Earner Tax Credit and is also repaying a student loan.

Likely Tax Code: MESL

Frequently Asked Questions

What is the M tax code?

The M tax code is generally used when you have one main source of employment income and do not have a student loan.

What is the ME tax code?

The ME tax code is for eligible employees whose main income qualifies for the Independent Earner Tax Credit.

What is the MSL tax code?

The MSL tax code applies when your main employment is also subject to compulsory student loan repayments.

What is the MESL tax code?

MESL combines the Independent Earner Tax Credit with compulsory student loan deductions for eligible employees.

What is the ST tax code?

ST is a secondary income tax code used when your combined annual income falls within the applicable Inland Revenue threshold.

What is the SH tax code?

SH is another secondary income tax code that applies to employees with higher combined annual earnings from multiple jobs.

What is the S tax code?

The S tax code is commonly used for secondary employment depending on your estimated annual income.

Can I have two tax codes?

Yes. If you have multiple jobs, each employer may use a different tax code depending on whether the employment is your main or secondary source of income.

What happens if I choose the wrong tax code?

You may pay too much or too little PAYE tax during the year. Inland Revenue may later issue a tax bill or refund after reviewing your income.

How do I change my tax code?

Complete a new IR330 Tax Code Declaration Form and provide it to your employer. Your employer will update your PAYE deductions from your next available pay cycle.

Do I need to notify Inland Revenue?

In most situations, updating your employer by completing an IR330 form is sufficient. However, some circumstances may require you to contact Inland Revenue directly.

How do I know which secondary tax code to use?

Your secondary tax code depends on your estimated total annual income from all jobs. If you’re unsure, seek professional advice before completing your IR330 form.

Can I change my tax code at any time?

Yes. You should update your tax code whenever your employment or financial circumstances change.

What happens if I repay my student loan?

Once your student loan has been fully repaid, you should update your tax code if you were previously using MSL or MESL to avoid unnecessary deductions.

Where can I get help choosing the correct tax code?

If you’re unsure which tax code applies to your circumstances, speaking with a qualified tax professional can help ensure you’re paying the correct amount of PAYE tax.

Related IRD Resources

You may also find these New Zealand tax guides helpful:

• PAYE Calculator NZ
• GST Calculator NZ
• Income Tax Calculator NZ
• How to Apply for an IRD Number
• Student Loan Repayment Guide
• IRD Tax Refund Guide

Why Trust IRD Guru?

• ✔ New Zealand tax specialists
• ✔ Practical guidance on PAYE and IRD compliance
• ✔ Up-to-date information aligned with Inland Revenue guidance
• ✔ Support for employees, contractors, sole traders and businesses
• ✔ Easy-to-understand explanations without complex tax jargon

Last reviewed: July 2026

Disclaimer: This guide is intended for general information only and should not be considered tax or legal advice. Tax rules and individual circumstances can vary. For advice tailored to your situation, consult a qualified tax professional.

NZ Tax Codes For Migrants & International Workers

Migrants and international workers are often unsure which NZ tax code applies to their situation.

Factors affecting tax code selection may include:

• tax residency status
• student loans
• multiple jobs
• freelance income
• overseas income

Related: 92-Day Rule New Zealand Explained

How To Check Your Current Tax Code

You can check your NZ tax code through:

• your payslip
• your employer
• your myIR account

Related: IRD Contact Number NZ

Final Thoughts

Understanding NZ tax codes is important for employees, freelancers, contractors, students, and business owners across New Zealand.

Using the correct tax code can help reduce the risk of unexpected tax bills, underpaid PAYE, and compliance issues with IRD later.

As more New Zealanders manage multiple jobs and side income streams, regularly checking tax codes is becoming increasingly important.