Primary-job code with no student loan and no IETC (2026-27).
Take-home on M — 2026-27 IRD rates
Annual deductions for someone paid on code M. Numbers below include income tax, ACC earner's levy, and student loan (where applicable). KiwiSaver is not included — add your chosen rate on top.
Annual gross
Income tax (PAYE)
ACC levy
Take-home
Effective rate
$40,000
$5,908
$700
$33,392
16.5%
$70,000
$13,221
$1,225
$55,555
20.6%
$100,000
$22,878
$1,750
$75,373
24.6%
$150,000
$39,378
$2,625
$107,998
28.0%
Source: IRD published 2026-27 tax brackets, ACC earner's levy 1.75%, student-loan rate 12% over $24,128. See full PAYE calculator for any income and pay period.
Who should use M?
Use M when this is your main job (the one that pays most), you do NOT have a student loan, and you are not entitled to the Independent Earner Tax Credit: your annual income is under $24,000 or $70,000 or more, or you or your partner get Working for Families, you get a main benefit, NZ Super or a veteran's pension (or an overseas equivalent), or you are not NZ resident. Progressive rates apply from the first dollar.
When to switch from M
MEYou earn from $24,000 to under $70,000 and none of the IETC exclusions apply (no Working for Families, main benefit, NZ Super or veteran's pension) — switch to ME to claim the $520/year Independent Earner Tax Credit.
M SLYou have an NZ government student loan — your employer must deduct 12% over the weekly/fortnightly threshold.
Common mistakes with M
⚠M is the most common primary-job code but can be the wrong one: if you earn $24k to under $70k and none of the IETC exclusions apply, ME puts up to $520/year into your pay as you go (on M, IRD gives the same credit after your year-end assessment).
⚠If this is actually your second job (not your biggest), using M here will under-tax and you may owe money at year-end.
No. There is no default code: if you give your employer no tax code, PAYE is taken at the non-notified rate of 45% (Income Tax Act 2007 schedule 2, part A, clause 3). M is the code for a main job when you are not entitled to the Independent Earner Tax Credit. Use ME instead if your annual income is $24,000 to under $70,000 and none of the IETC exclusions apply (no Working for Families, main benefit, NZ Super or veteran's pension), to receive the credit (up to $520/year) through your pay.
What if I have two jobs and both use M?
Only your highest-paid job should use M (or ME). The second job must use a secondary code (SB/S/SH/ST/SA) based on your total annual PAYE income payments. Using M on both jobs will under-tax you.
