Tax Code
A tax code is a code you provide to your employer (on an IR330 form) that determines how PAYE is calculated on your pay. Getting the right tax code is important — the wrong code can mean you over-pay or under-pay tax throughout the year.
Common tax codes include: M (main or only job), ME (main job, eligible for IETC), M SL (main job with student loan), and the secondary codes SB (secondary job, income up to $15,600), S (secondary job, income $15,601–$53,500), SH (secondary job, income $53,501–$78,100), ST (secondary job, income $78,101–$180,000), and SA (secondary job, income over $180,000). If you have a student loan, add 'SL' to your code.
If you don't provide a tax code, your employer must use the non-notification rate, which deducts tax at the highest rate. You can check which code is right for you using IRD's online tax code finder, or update your code through myIR at any time.
How it works
You declare your tax code to your employer using an IR330 form when you start a job, and your employer uses that code to work out how much PAYE to deduct from each pay. If you hold more than one job at the same time, each employer needs its own correctly matched tax code — using the main code (M or ME) on more than one job at once will under-deduct tax and leave you with a bill.
Which secondary code applies to a second or subsequent job depends on your total combined income across all your jobs, not just the pay from that one job — the bands mirror the income tax brackets (SB, S, SH, ST, SA). The ME code differs from the plain M code only in that it signals eligibility for the Independent Earner Tax Credit, and an 'SL' suffix on any code tells your employer to also deduct student loan repayments.
If you don't give your employer a completed tax code declaration, they're required to deduct tax at the non-notification rate — a higher rate than almost any correctly matched code — until you provide one. You can check whether you're on the right code using IRD's online tax code finder, or update it at any time through myIR.
Example: choosing a secondary tax code
Say you earn $45,000 from your main job (using tax code M) and take on a second job paying $15,000. Your combined income across both jobs is $60,000, which falls in the $53,501–$78,100 band.
Because that combined figure lands in the SH band, you'd give your second employer the tax code SH rather than S or ST, so the right amount of tax is withheld from that job without a big surprise at year end.
Frequently asked questions
What's the difference between the M and ME tax codes?
Both are for your main job, but ME signals to your employer that you're eligible for the Independent Earner Tax Credit, so slightly less tax is deducted each pay compared with the plain M code.
Which tax code should I use for a second job?
Use one of the secondary codes (SB, S, SH, ST, or SA), chosen based on your total combined income from all jobs added together, not just the pay from the second job alone.
What happens if I don't give my employer a tax code?
Your employer is required to deduct tax at the non-notification rate, which is higher than the correctly matched code for almost everyone, until you provide a completed IR330.
Related Terms
PAYE
PAYE (Pay As You Earn) is the system that New Zealand employers use to deduct income tax from employees' wages and salaries.
IRD
Inland Revenue Department (IRD), commonly known as Inland Revenue or simply IRD, is the New Zealand government agency responsible for collecting taxes, distributing social support payments, and enforcing tax compliance.
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.
Secondary Tax
If you have more than one job or income source, your secondary employer deducts tax using a secondary tax code.
Try the calculator
Use our free tool to see how tax code affects your tax.