Your tax code tells your employer how much PAYE to deduct from your wages, and the right code helps you avoid a bill at the end of the tax year. The wrong code can mean a bill at year end (underpayment) or more tax deducted than you owe during the year (overpayment). You notify your employer of your tax code using the IR330 form.
Use tax code M for your main job (no student loan) unless you qualify for ME. Add SL to M, ME or a secondary code if you have a student loan (e.g., M SL). Use ME if you qualify for the independent earner tax credit (the conditions are below). For a second job, use SB, S, SH, ST or SA depending on your combined total income. Don't use M for a second job: it is the wrong code, and IRD may ask your employer to change it.
Full List of NZ Tax Codes
Primary Employment (Main Job)
| Code | When to use |
|---|---|
| M | Main job when ME does not apply, including when income is $15,600 or less |
| ME | Main job, if you qualify for the independent earner tax credit (income $24,000–$70,000); no student loan |
| M SL | Main job + student loan repayment (no IETC) |
| ME SL | Main job + student loan; eligible for IETC |
Secondary Employment (Second Job / Additional Jobs)
| Code | Combined income from all sources | Rate applied |
|---|---|---|
| SB | $15,600 or less | 10.5% |
| S | $15,601–$53,500 | 17.5% |
| SH | $53,501–$78,100 | 30% |
| ST | $78,101–$180,000 | 33% |
| SA | Over $180,000 | 39% |
Add SL to any secondary code if you have a student loan (e.g., S SL, SH SL).
Casual Agricultural Workers
| Code | When to use |
|---|---|
| CAE | Casual agricultural workers (casual seasonal work on a day-to-day basis, for up to 3 months, including shearers and shed-hands) |
Elected Not to Receive IETC
If you or your partner receive Working for Families, or you otherwise do not qualify for IETC, use M rather than ME.
No-Notification Rate
If you do not provide an IR330 to your employer, they must deduct tax at the non-notified rate of 45% (plus the earners’ levy). Completing the IR330 avoids this rate.
Choosing the Right Code: Decision Guide
Step 1: Is this your main (or only) job?
- Yes → Go to Step 2
- No → Use a secondary code (SB, S, SH, ST, SA) based on combined income
Step 2: Do you have a student loan?
- Yes → Add SL (e.g., M SL or ME SL)
- No → Continue
Step 3: Do you qualify for the independent earner tax credit? The independent earner tax credit (IETC) pays up to $520 a year to New Zealand tax residents earning $24,000 to $70,000 (reducing by 13 cents a dollar above $66,000), as long as neither you nor your partner receives Working for Families and you don't receive an income-tested benefit, NZ Super or a Veteran's Pension (or an overseas equivalent).
- Yes → Use ME (to receive the IETC through your wages)
- No → Use M
How to Fill In an IR330
You complete an IR330 (Tax code declaration) when you start work with a new employer. You fill in:
- Your full name
- IRD number
- Tax code (e.g., M, M SL, SH)
- Signature and date
You can download a blank IR330 from ird.govt.nz if your employer does not provide one. If your tax code changes, give your employer a new IR330.
What Happens If You Use the Wrong Code
Using M for a Second Job (Too Low)
If you use code M for a second job, each employer taxes your income as if it starts from $0. At year end, IRD combines your income and you may have a tax bill to pay.
Example:
- Main job: $55,000 (correctly taxed at M)
- Second job: $15,000 (incorrectly taxed at M — taxed as if $0–$15,000 at low rate)
- Correct combined tax: 30% applies to the second job income
- Tax underpaid: about $2,900 to repay (the $15,000 is taxed at 10.5% instead of 30%, a difference of 19.5%, so $2,925)
Using Too High a Secondary Code
You may overpay through the year and get a refund after year end, but your take-home pay is lower in the meantime.
Independent Earner Tax Credit (IETC) and Tax Code ME
The ME code delivers the IETC through your wages by reducing the PAYE withheld. The IETC is worth up to $520/year for eligible earners.
You can use ME for your main job if you qualify for the independent earner tax credit:
- You are a New Zealand tax resident.
- Your income for the tax year is between $24,000 and $70,000; above $66,000 the credit reduces by 13 cents for each extra dollar.
- Neither you nor your partner receives Working for Families.
- You don't receive an income-tested benefit.
- You don't receive NZ Super or a Veteran's Pension.
- You don't receive an overseas equivalent of any of these payments.
If you have a student loan, use ME SL. The income test counts your net income from all sources, so if you have other income, check your total stays in the range.
If you earn between $66,000 and $70,000, the IETC abates (13 cents per dollar over $66,000).
See our Independent Earner Tax Credit (IETC) guide for full details.
Student Loan and Tax Codes
If you have a NZ student loan, add SL to your tax code. Your employer deducts student loan repayments in addition to PAYE.
Standard repayment rate: 12 cents per dollar earned above the repayment threshold ($24,128 annual income / $464/week, frozen at this level for 2024–25, 2025–26 and 2026–27).
If you have a repayment deduction exemption certificate (for example, you are studying full-time and expect to earn under the annual repayment threshold), give it to your employer so they stop student loan deductions.
Tailored Tax Codes: Applying for a Different Rate
If you think your standard tax code will leave you with a large refund or tax bill at the end of the year (for example because you have a second job or other income apart from your main job), you can apply to IRD for a tailored tax code (STC on the IR330).
When a Tailored Tax Code Is Useful
- You have a second job or other income apart from your main job
- You earn schedular payments and the standard rate for your activity would have you paying too much tax (a tailored tax rate applies here)
- You receive ACC payments while you are also working
How to Apply
- Log in to myIR, go to your income tax account, click ‘More…’, then ‘Tailored tax code application’ (under ‘Manage account’)
- Provide information about your income
- IRD calculates the tax rate for your situation, which can be higher or lower than the standard rates
- You show your certificate to your employer, who applies it instead of the standard code
STCs are issued for one tax year and must be renewed annually.
Tax Codes for Contractors and Schedular Payments
Contractors who receive schedular payments (rather than PAYE wages) are subject to withholding tax rather than PAYE. The default withholding rates for various activity types are set in the Income Tax Act.
Common schedular payment rates (from IRD’s IR330C activity list):
| Payment type | Standard withholding rate |
|---|---|
| Labour-only contracts (building industry) | 20% |
| Entertainers (NZ resident) | 20% |
| Commissions (insurance agents/sub-agents, salespeople) | 20% |
| Company directors’ fees | 33% |
| Honoraria / examiners’ fees / public office holders | 33% |
Contractors can apply to IRD for a tailored tax rate (for example, if they have business expenses that lower the tax they owe) or, if they don’t want tax deducted, for a certificate of exemption. Without an IR330C form, the payer must withhold at the 45% non-notified rate (20% if the contractor is a non-resident company).
Tax Codes for Working Holiday Makers
Working holiday visa holders are treated as NZ tax residents if they are in NZ for more than 183 days in a 12-month period. Either way, your employer deducts PAYE using the tax code on your IR330, and the normal PAYE tax brackets (10.5%–39%) apply to NZ-sourced wages. New Zealand taxes non-residents on income from NZ sources too.
For shorter stays:
- Use code M for employment income (same as residents), or a secondary code if it’s not your only job
- The 15% flat withholding rate sometimes mentioned for non-residents applies to non-resident contractors receiving schedular payments (via the IR330C), not to employees paid wages through PAYE
If you’re on a working holiday in NZ, provide an IR330 to your employer with your IRD number and code M. Apply for an IRD number online at ird.govt.nz, or with the IR742 form if you are still overseas.
Employer Obligations — Checking Your Tax Code
As an employer, you must:
- Get a completed IR330 from each new employee when they start work
- Apply the tax code stated by the employee; if IRD writes to say it is wrong, change it as IRD asks
- If an employee provides no IR330 (or an incomplete one), deduct at the no-notification rate (45%, plus the ACC earners’ levy)
- Keep the completed IR330 on file for 7 years after the last wage payment to that employee
Tax Code Lookup — Quick Decision Table
| My situation | Code to use |
|---|---|
| Only job, no student loan, not eligible for ME | M |
| Only job, eligible for the independent earner tax credit (income $24,000–$70,000), no student loan | ME |
| Only job, have a student loan, not eligible for ME SL | M SL |
| Only job, eligible for the independent earner tax credit (income $24,000–$70,000), have student loan | ME SL |
| Second job, combined income up to $15,600 | SB |
| Second job, combined income $15,601–$53,500 | S |
| Second job, combined income $53,501–$78,100 | SH |
| Second job, combined income $78,101–$180,000 | ST |
| Second job, combined income over $180,000 | SA |
| Casual agricultural work (day-to-day, up to 3 months, including shearing) | CAE |
| No IR330 provided | Employer must use the no-notification rate of 45% plus ACC earners’ levy |
| Other circumstance (for example, a large expected refund or tax bill) | Apply for STC via myIR |
Add SL to M, ME or a secondary code (SB, S, SH, ST, SA) if you have a student loan.
Frequently Asked Questions
I have two jobs. Which one is my main job?
Your main job is the one that is your main or highest source of income, not necessarily the one you’ve had longest. Assign code M (or ME) to the main job and a secondary code to the other.
My employer asked me to complete an IR330. What do I put for tax code?
Use code M for your main job (assuming no student loan and you don’t qualify for ME). If you have a student loan, use M SL. If you qualify for the independent earner tax credit (income $24,000–$70,000 and the other conditions above), use ME.
I changed jobs mid-year. Do I need to re-complete an IR330?
Yes — provide your new employer with an IR330 at the start of employment. Consider your combined income from both the old and new employer to ensure you use the correct tax code for the new role.
What is the no-notification rate?
If you don’t provide an IR330, your employer must deduct tax at the 45% non-notified rate plus the ACC earners’ levy, which is higher than any standard PAYE rate. This is more tax than your correct tax code would take, so you may overpay during the year. Giving your employer a completed IR330 avoids this rate.