If you work more than one job or receive income from multiple sources, understanding the secondary tax rate NZ rules can help you check your PAYE deductions. New Zealand uses secondary tax codes to calculate withholding on additional income based on your estimated total annual income. This guide explains the rates, codes, examples and steps you can take if you think your tax code is incorrect.
Tax year covered: 1 April 2026 to 31 March 2027.
How Does Secondary Tax Work in NZ?
Secondary tax is PAYE deducted from a secondary source of income, such as a second job. Your secondary tax code helps your employer or payer determine how much tax to withhold. The applicable rate depends on your estimated annual income from all sources.
The standard secondary codes are SB, S, SH, ST and SA. The listed rates range from 10.5% to 39%, before any applicable ACC earners’ levy. Secondary tax is withholding during the year, not a separate additional income tax charged on top of your final tax liability.
Official guidance: Inland Revenue (IRD) — About tax codes .
Secondary Tax Rate NZ: Codes and Thresholds for 2026/27
The correct secondary code is based on your estimated total annual income from all sources, rather than simply the amount earned from your second job. The following thresholds and rates are published by IRD.
| Estimated annual income from all sources | Secondary tax code | Tax rate before ACC levy |
|---|---|---|
| $15,600 or less | SB | 10.5% |
| $15,601–$53,500 | S | 17.5% |
| $53,501–$78,100 | SH | 30% |
| $78,101–$180,000 | ST | 33% |
| $180,001 and over | SA | 39% |
Important: These are the standard secondary tax withholding rates before any applicable ACC earners’ levy. Your deductions may also be affected by student loan repayments, KiwiSaver and other applicable rules. Check the current IRD guidance for your circumstances.
What Is Secondary Tax in New Zealand?
Secondary tax is the tax withheld from income that is not treated as your main source of employment income for PAYE purposes. It commonly applies when you earn wages or salary from more than one employer.
New Zealand has progressive income tax rates. Your final income tax liability is calculated using your taxable income and the applicable rules for the tax year. A secondary tax code helps a second employer withhold tax at a rate intended to account for the income you receive elsewhere.
This is why the secondary tax rate NZ system should not be interpreted as a penalty for working a second job. It is designed to help collect tax during the year and reduce the likelihood of an unexpected tax bill.
Example: How Is Secondary Tax Calculated?
Imagine you earn $55,000 a year from your main job and expect to earn another $20,000 from a second job.
- Main job income: $55,000
- Additional job income: $20,000
- Estimated total annual income: $75,000
Based on these figures, the relevant standard secondary code may be SH, which has a withholding rate of 30% before any applicable ACC earners’ levy.
At a simplified 30% withholding rate, $20,000 of secondary income would have $6,000 withheld for income tax, before considering any applicable ACC levy or other deductions. This is an illustration, not a complete payslip calculation or a personal tax assessment.
Your actual final tax position depends on your total taxable income, eligibility for credits and other relevant circumstances. If your income changes during the year, review your code with IRD.
Who May Need a Secondary Tax Code?
You may need to consider a secondary tax code if you receive:
- Salary or wages from a second employer.
- Employment income in addition to another taxable income source.
- Income from a job alongside certain taxable payments, where the relevant rules require a secondary code.
Not every additional payment uses a standard secondary employment code. For example, schedular payments and some lump-sum payments can have different withholding rules. Check the relevant IRD guidance rather than assuming that the same code applies to every income source.
How to Choose the Correct Secondary Tax Code
- Estimate your total annual income. Include your expected income from all relevant sources for the tax year.
- Check the official IRD guidance. Review the secondary code thresholds and the rules for your type of income.
- Complete the relevant declaration. Employees generally provide their employer or payer with an IR330 tax code declaration.
- Update your code if circumstances change. A change in income or circumstances may mean your existing code is no longer appropriate.
- Ask IRD if you are unsure. IRD provides guidance and may be able to help with tailored tax options in eligible circumstances.
You can start with IRD’s tax code selection guidance .
Do not select a code solely because it gives you a higher take-home pay. The correct choice should reflect your circumstances and the official requirements.
Can You Get a Tax Refund if Too Much Secondary Tax Was Deducted?
Yes, it is possible. PAYE deductions are payments collected during the year, while your final income tax position depends on your total taxable income and the applicable rules. If more tax has been deducted than you ultimately owe, you may be entitled to a refund. If too little has been deducted, you may have tax to pay.
After the tax year ends on 31 March, IRD may calculate your income tax position using information reported by employers and other payers. Check your details through myIR and follow IRD’s instructions if you need to correct your information.
Frequently Asked Questions About Secondary Tax in NZ
1. What is the secondary tax rate NZ for 2026/27?
Standard secondary withholding rates range from 10.5% to 39% before any applicable ACC earners’ levy. The correct rate depends on your estimated total annual income and the relevant secondary tax code.
2. Why is my second job taxed at 30%?
Your employer may be using the SH secondary tax code, which has a standard withholding rate of 30% before any applicable ACC levy. Check your estimated total annual income and confirm the correct code with IRD if you believe it is wrong.
3. Is secondary tax an extra tax?
No. Secondary tax is withholding from additional income during the year. Your final income tax liability is determined by your total taxable income and the rules that apply to you.
4. Can I change my secondary tax code?
If your circumstances change or you believe your code is incorrect, check the IRD guidance and provide your employer or payer with an updated tax code declaration where required.
5. Does secondary tax apply only to a second job?
No. It can apply to certain other income sources, depending on the nature of the payment and the applicable rules. Some payment types have separate withholding requirements.
6. Will I get a refund if too much tax was deducted?
You may receive a refund if your total tax deductions exceed your final tax liability. IRD determines your final position based on the information available and your circumstances.
7. Where can I check the official secondary tax codes?
Visit Inland Revenue’s secondary tax codes page for official guidance.
Unsure About Your Tax Code or PAYE Deductions?
Understanding the secondary tax rate NZ rules can help you ask the right questions about your deductions, but the correct treatment depends on your income and circumstances.
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Editorial Information
Publisher: DFK Orb360 O’Halloran.
Topic: New Zealand secondary tax codes and PAYE withholding.
Last checked: 12 October 2026.
This article is general information, not personalised tax advice. Tax treatment depends on individual circumstances and current rules. Confirm your position with Inland Revenue or a qualified tax adviser. A qualified reviewer should verify this article before publication; add their name and professional credentials only after that review has taken place.
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