Secondary Tax Code NZ: What Tax Code Should You Use for a Second Job?
Secondary Tax Code NZ Explained
A secondary tax code NZ is generally used when you receive taxable income from more than one source at the same time. Your main or highest income source uses a main tax code, while additional taxable income may need a secondary tax code.
In New Zealand, the main secondary tax codes are SB, S, SH, ST and SA. The correct code depends on your expected total annual income from all sources. If you have a New Zealand student loan, the corresponding secondary code can also include SL, such as S SL, SH SL or ST SL.
Using the correct secondary tax code helps your employer deduct tax at a rate that better reflects your total annual income and reduces the risk of paying too little or too much tax during the year.
Quick answer: If you have a second job or another taxable income source, you may need a secondary tax code. Use the IR330 Tax Code Declaration or IRD’s tax-code tool to confirm the correct code for your circumstances.
What Is a Secondary Tax Code NZ?
A secondary tax code NZ is a tax code used for an additional source of taxable income when you already have a main income source.
Your main income is generally your highest source of income. Other taxable income may be treated as secondary income.
Secondary income can include:
- A second job
- Another source of salary or wages
- A taxable pension
- Some Work and Income payments
- ACC compensation payments
- Student Allowance
- Other taxable payments received alongside your main income
The purpose of a secondary tax code NZ is to help your payer deduct the right amount of tax based on your total expected annual income.
Learn more about tax codes in our MESL Tax Code NZ guide.
Why Does New Zealand Have Secondary Tax Codes?
New Zealand uses progressive income tax rates, which means different portions of your income are taxed at different rates.
Your second employer does not automatically know how much you earn from your main job. A secondary tax code NZ helps the second payer apply a rate that reflects your expected total annual income.
This can reduce the chance of:
- Underpaying tax during the year
- Receiving an unexpected tax bill
- Having too much tax deducted
- Using the wrong rate on your second source of income
What Tax Code Should I Use for a Second Job in NZ?
If you already have one main source of income and start a second job, you will generally need to use a secondary tax code for the additional job.
The correct second job tax code NZ depends on your estimated annual income from all sources combined.
You should not simply choose a tax code based on the amount you earn from your second job alone.
For example, if you earn $60,000 from your main job and another $10,000 from a second job, you should consider your expected total annual income of $70,000 when selecting the secondary tax code.
Secondary Tax Codes NZ: SB, S, SH, ST and SA Explained
IRD currently lists the following secondary tax code NZ thresholds and rates:
| Estimated Annual Total Income | Secondary Tax Code | Secondary Tax Rate Before ACC |
|---|---|---|
| $0 – $15,600 | SB | 10.5% |
| $15,601 – $53,500 | S | 17.5% |
| $53,501 – $78,100 | SH | 30% |
| $78,101 – $180,000 | ST | 33% |
| $180,001 and over | SA | 39% |
These rates apply before ACC levies where relevant.
Your actual tax position depends on your full annual income and circumstances, so use the IR330 or IRD tax-code tool to confirm the correct code.
What Is the SB Tax Code NZ?
The SB tax code NZ is generally used for secondary income where your expected total annual income from all sources is $15,600 or less.
The secondary tax rate for SB is currently 10.5% before ACC levies.
What Is the S Tax Code NZ?
The S tax code NZ generally applies where your expected annual income from all sources is between $15,601 and $53,500.
The current secondary tax rate for S is 17.5% before ACC levies.
What Is the SH Tax Code NZ?
The SH tax code NZ generally applies where your expected annual income from all sources is between $53,501 and $78,100.
The current secondary tax rate for SH is 30% before ACC levies.
What Is the ST Tax Code NZ?
The ST tax code NZ generally applies where your expected annual income from all sources is between $78,101 and $180,000.
The current secondary tax rate for ST is 33% before ACC levies.
What Is the SA Tax Code NZ?
The SA tax code NZ applies where your expected annual income from all sources is $180,001 or more.
The current secondary tax rate for SA is 39% before ACC levies.
How Your Total Annual Income Determines Your Secondary Tax Code
The important point with a secondary tax code NZ is that the code is based on your expected annual income from all taxable sources, not simply your second job.
For example:
- Main job income: $55,000
- Second job income: $12,000
- Expected total annual income: $67,000
Because the total expected annual income is $67,000, the secondary source would fall within the range associated with the SH secondary tax code under current thresholds.
This is why checking your total annual income is important before selecting your second-job tax code.
Secondary Tax Codes With a Student Loan
If you have a New Zealand student loan, your secondary tax code NZ may include the letters SL.
Examples include:
- SB SL
- S SL
- SH SL
- ST SL
- SA SL
The SL tells your employer that student loan deductions also apply.
How Are Student Loan Repayments Calculated on a Second Job?
For a secondary job, IRD states that the normal repayment threshold does not apply because it has already been taken into account with your main job.
This means student loan repayments are generally deducted at 12% of every dollar earned from the secondary job.
This is different from a main job, where the repayment threshold applies before the 12% student loan repayment rate is calculated.
If you want to understand how student loan codes work, read our ME SL and MESL Tax Code NZ guide.
Does Having a Second Job Mean You Pay More Tax in NZ?
Not necessarily.
Having a second job does not create a separate penalty tax simply because you have two jobs.
What matters is your total taxable income.
Because New Zealand uses progressive tax rates, earning more total income can mean that some of your additional income falls into a higher tax bracket.
A secondary tax code NZ helps your second payer deduct tax at a rate designed to reflect that higher layer of income.
Why Does My Second Job Look Like It Is Taxed More?
Many people notice that the deduction rate on their second job appears higher than the tax deducted from their main job.
This is because your main income has already used the lower layers of New Zealand’s progressive income tax system.
The secondary tax rate is intended to estimate the rate that applies to the additional income based on your expected annual total income.
This does not necessarily mean that your second job is subject to a special or punitive tax.
What Happens If You Use the Wrong Secondary Tax Code?
Using the wrong secondary tax code NZ can mean too much or too little tax is deducted during the year.
If too little tax is deducted, you may have tax to pay after your end-of-year income tax assessment.
If too much tax is deducted, you may be entitled to a refund.
IRD may also contact your employer or payer if it identifies that you are using an unsuitable tax code.
For example, IRD states that if someone is incorrectly using an M tax code on two income sources at the same time, it may ask the employer or payer to change the code.
What Happens If You Do Not Give Your Employer a Tax Code?
If you do not provide your employer with a completed IR330 Tax Code Declaration, IRD states that tax may be deducted at the non-declaration rate of 45%.
That makes it important to give each employer or payer the correct tax-code information when you start receiving income.
How to Change Your Secondary Tax Code NZ
Your tax code may need to change if your income or personal circumstances change.
Step 1: Estimate Your Total Annual Income
Add together your expected taxable income from your main job, second job and any other relevant taxable income sources.
Step 2: Check the Correct Tax Code
Use IRD’s tax-code tool or the flowchart contained in the current IR330 Tax Code Declaration.
Step 3: Complete a New IR330
Complete the IR330 with your updated tax code.
Step 4: Give It to Your Employer or Payer
Give the completed form to the employer or payer responsible for deducting PAYE from that source of income.
IRD says you are responsible for telling your employer or payer when your tax code changes.
When Should You Review Your Secondary Tax Code?
You should consider checking your secondary tax code NZ when:
- You start a second job
- You stop a second job
- Your salary increases or decreases significantly
- Your expected annual income changes
- You take out a student loan
- You repay your student loan
- Your main source of income changes
- You begin receiving another taxable payment
IRD specifically notes that starting a second job or experiencing a change in expected annual income can mean you need to choose a different tax code.
Can You Get a Tailored Tax Code?
Yes. In some circumstances, the standard secondary tax-code rates may result in too much or too little tax being deducted.
IRD offers tailored tax options for people whose circumstances mean the standard rates may not accurately reflect the amount of tax they should pay.
A tailored tax code may be useful if you regularly receive a large tax refund or tax bill.
Secondary Tax Code NZ Example
Consider someone with the following expected income:
- Main job: $70,000
- Weekend job: $15,000
- Total expected annual income: $85,000
The secondary-tax-code decision is based on the expected total annual income of $85,000.
Under the current IRD thresholds, an annual total income between $78,101 and $180,000 falls within the ST secondary tax-code range.
If the person also has a New Zealand student loan, the applicable code may include SL, depending on their circumstances.
This example is illustrative only. Always check the current IRD tax-code tool or IR330 before selecting a code.
People Also Ask About Secondary Tax Code NZ
What is a secondary tax code in NZ?
A secondary tax code NZ is generally used for an additional taxable income source when you already have a main source of income. The code helps the payer deduct tax based on your expected total annual income.
What tax code should I use for a second job in NZ?
The correct second-job tax code depends on your estimated annual income from all taxable sources. The main secondary codes are SB, S, SH, ST and SA. Check the IR330 or IRD tax-code tool before choosing a code.
Do I need a secondary tax code if I have two jobs?
Generally, yes. One income source is treated as your main income, while the additional source may require a secondary tax code NZ.
Is secondary tax higher in NZ?
Secondary tax may appear higher because your additional income is being taxed at a rate designed to reflect your total annual income. It is not a separate penalty for having a second job.
What is the S tax code in New Zealand?
The S tax code currently applies to secondary income where expected annual total income is between $15,601 and $53,500. The current rate is 17.5% before ACC levies.
What does SH tax code mean?
SH is a secondary tax code currently associated with expected annual total income between $53,501 and $78,100. The current rate is 30% before ACC levies.
What does ST tax code mean?
ST is a secondary tax code for expected annual total income between $78,101 and $180,000. Its current secondary tax rate is 33% before ACC levies.
What is the SA tax code NZ?
SA is the secondary tax code currently used for expected annual total income of $180,001 or more. The current secondary tax rate is 39% before ACC levies.
What does SL mean after a secondary tax code?
SL indicates that New Zealand student loan deductions apply. For example, SH SL combines the SH secondary tax code with student loan deductions.
How much student loan do I repay from a second job?
IRD states that the student loan repayment threshold does not apply to secondary employment because the threshold has already been considered for the main job. Student loan repayments are generally 12% of every dollar earned from the secondary job.
Can IRD change my tax code?
IRD may ask your employer or payer to change your tax code if it identifies that you are using a code that does not suit your circumstances. This is intended to reduce the risk of overpaying tax or receiving an unexpected tax bill.
What happens if I do not give my employer an IR330?
If you do not provide an IR330 Tax Code Declaration, your employer may deduct tax at the 45% non-declaration rate.
Can I change my secondary tax code during the year?
Yes. If your income, job, student loan status or other circumstances change, you may need to complete a new IR330 and provide it to your employer or payer.
Secondary Tax Code NZ: Quick Answer Table
| Question | Quick Answer |
|---|---|
| What is secondary tax? | Tax deducted from an additional income source using a secondary tax code. |
| What are the secondary codes? | SB, S, SH, ST and SA. |
| What determines the code? | Your expected total annual income from all sources. |
| Does a second job mean double tax? | No. Tax still depends on your total taxable income. |
| Does SL mean student loan? | Yes. |
| Do I need an IR330? | Yes, employees generally use the IR330 to declare their tax code. |
| Can my tax code change? | Yes, if your income or circumstances change. |
Final Takeaway: Choosing the Right Secondary Tax Code NZ
The correct secondary tax code NZ depends primarily on your expected total annual taxable income and whether factors such as a New Zealand student loan apply.
The main secondary codes are:
- SB – lower expected total income
- S – lower-middle income range
- SH – middle income range
- ST – higher income range
- SA – income of $180,001 or more
If you start a second job, your income changes, or your student loan status changes, review your tax code rather than assuming your existing code is still correct.
For personalised help with an IRD issue, visit IRD Guru.
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