No-Notification Rate
If you start a new job without providing a completed IR330 tax code declaration form, your employer is legally required to apply the no-notification rate — the highest applicable withholding rate — to your pay. For most employees, this means 45% is deducted from your wages, significantly more than you would normally owe.
The no-notification rate exists as a safeguard to prevent under-deduction of tax. It ensures IRD collects at least enough tax, even when taxpayer details are missing. Any overpayment is refunded after your end-of-year income tax assessment.
To avoid the no-notification rate, always provide your employer with a completed IR330 form (available on IRD's website) before or on your first day of work. You'll need to know your IRD number and choose the correct tax code for your situation (e.g. M for a main job, S for a secondary job).
How it works
The no-notification rate isn't limited to brand-new employees on their very first day — it applies to any pay period where your employer hasn't received a valid tax code declaration, including after a gap in employment or where an IR330 was submitted but rejected as incomplete or invalid.
The same concept recurs outside PAYE: contractors receiving schedular payments who don't submit a completed IR330C face their own no-notification rate of 45% (20% for non-resident contractor companies), showing this isn't a PAYE-specific quirk but a general IRD safeguard applied whenever a payer doesn't have valid tax details on file.
The 45% rate is deliberately set higher than almost anyone's actual marginal rate, to create a strong incentive to sort out your tax code quickly rather than to closely estimate what you'll actually owe — once your employer processes a valid tax code, the higher rate stops applying from your next pay run, and any amount over-withheld in the meantime is refunded through your end-of-year income tax assessment.
Example: no-notification rate versus the correct code
A new employee earns $1,000 in their first weekly pay before their tax code paperwork is processed, and their correct marginal rate for that income level would otherwise fall in the 17.5% bracket.
At the no-notification rate: tax withheld = 45% x $1,000 = $450.
Once the correct code is applied (illustrative marginal rate 17.5%): tax would be roughly 17.5% x $1,000 = $175 — a $275 difference for that pay period, refunded via the end-of-year income tax assessment once the earlier over-withholding is reconciled.
Frequently asked questions
How long does the 45% rate apply once I fix my tax code?
Only for the pay periods before your employer processes a valid IR330 — once they have your correct code, your normal rate applies from the next pay run onward, while earlier over-withheld pay periods are reconciled later in your end-of-year income tax assessment.
Does the no-notification rate apply to contractors too?
Yes — contractors receiving schedular payments face their own no-notification rate of 45% (20% for non-resident contractor companies) if they don't provide a completed IR330C, which is the contractor equivalent of the IR330 used by employees.
Can my employer backdate my tax code once it's sorted out?
No — PAYE is deducted based on the tax code in effect at the time of each pay run; any over-deduction from periods taxed at the no-notification rate is corrected later through your end-of-year IRD assessment, not by reissuing past payslips.
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