Secondary tax in NZ: what happens to your pay when you have two jobs

How secondary tax codes work and why they are not a penalty

New Zealand's tax rates rise as income rises. Your main job's M code assumes that job is all you earn, so it uses the lower rates first. Income from a second job sits on top of that, so it belongs in a higher band, and the secondary code deducts tax at that band's rate.

Inland Revenue sets the codes by your expected total income for the year from all sources:

The code feels like a penalty only when the wrong one is used, or when a small second job is taxed at a rate higher than your total income needs.

Choosing the right code for the second job

Add up what you expect to earn from both jobs over the year, then pick the code for that total. Say your main job pays $60,000 and a weekend job adds $12,000. Your total is $72,000, which is in the SH band, so the second job should use SH at 30%.

At 2026/27 rates, PAYE on the $12,000 at 30% is $3,600. On the S code it would be deducted at 17.5%, which is $2,100, leaving $1,500 short, to be paid after the end of the tax year. On SH, the right amount is deducted each pay.

Give the second employer a tax code declaration (IR330) with your code before your first pay: an employer with no declaration must deduct tax at 45%. If you have a student loan, use the secondary code with SL, and 12% of every dollar from the second job goes to the loan, with no threshold.

Getting a refund at year end

If the secondary code takes more than your total income requires, you will usually get the difference back after the end of the tax year, when Inland Revenue squares up your income. A small second job taxed at a high rate is the common case.

If you would rather not wait, you can apply for a tailored tax code through myIR or form IR23BS, which sets a rate that matches your actual situation. It has to be reapplied for each year. If you qualify for the independent earner tax credit, you can claim it as you go with an ME code on your main job, as long as that job pays over $24,000 and your total income is between $24,000 and $70,000; otherwise it is worked out at the end of the year, or through a tailored code.

Casual and temp work on top of a main job

Casual, temp and seasonal work follow the same rules: the main job is M, the extra work is secondary. The difference is that casual income is hard to predict, so estimate it generously, and review the code if your hours change a lot. If you are unsure, the square-up at the end of the year corrects small differences. Our guide to working while studying covers the common case of a part-time job alongside study and a student allowance.

If you receive a main benefit from Work and Income, Inland Revenue's rule is that the benefit uses the M code and any other salary or wages use a secondary code. Our article on temping while job hunting covers how that works with Jobseeker Support.

Seeing the combined take-home

To see what two jobs actually pay you, work out the main job's take-home and then the second job's pay after its secondary code. The Offer Comparer works out a main job's take-home at 2026/27 rates with no account needed, on tax code M; add the second job's pay after its secondary rate yourself.

In Your Career, part of the paid plans at jobtracker.co.nz, you record each job you hold with its code, and it recommends the right secondary code from your total income and flags a wrong one before it becomes a bill.

Check the code before the first pay