Secondary Tax New Zealand 2026-27: Second Job Rates

A second job in New Zealand is taxed using a secondary tax code that reflects where your combined income falls in the tax scale. You choose the code yourself and give it to your second employer. Picking the right code prevents under- or over-withholding and reduces any surprise at year-end IR3 time.

Secondary tax codes 2026-27

Pick the code that covers the top of your total income from all jobs, not just the second job's income alone.

Code PAYE rate Use when combined income falls in this range
SB 10.5% Up to $14,000
S 17.5% $14,001 to $48,000
SH 30% $48,001 to $70,000
ST 33% $70,001 to $180,000
SA 39% Over $180,000

How to choose the right secondary tax code

Add your expected annual income from all jobs together. Find the bracket that covers the result, then use the code for that bracket on your second (and any subsequent) job.

Example: your primary job pays $52,000 and your second job pays $18,000, giving combined income of $70,000. That falls in the $48,001 to $70,000 range, so use SH on the second job. If you used S (17.5%) instead, too little tax would be withheld and you would owe tax after your IR3.

Why your second job is not necessarily overtaxed

The 19th-century intuition that "a second job is always taxed at the highest rate" confuses marginal rates with average rates. The secondary tax code targets only the marginal rate that applies to your additional income, not to your entire income. If your codes are correct, the total PAYE withheld across both jobs closely matches your actual tax bill.

Overpayment happens when people use a code that is too high (SA on $80,000 combined income). Underpayment happens when they use a code that is too low (S on $60,000 combined income). Both are corrected by the IR3 but avoidable with the right code.

The IR3 year-end square-up

If you have two or more income sources in a tax year, IRD requires you to file an IR3 return. The IR3 adds up all income and applies the correct tax at each rate, comparing the result to the total PAYE withheld. A refund arises if more was withheld than owed; a tax bill arises if less was withheld. You can file online via myIR.

Student loans and KiwiSaver on a second job

Student loan repayments are deducted from every income source at 12% of income above the repayment threshold ($20,020 per year for 2026-27, applied proportionally). KiwiSaver contributions are also deducted from each employer at your elected rate. Both apply to secondary income as well as primary income.

Frequently asked questions

What is a secondary tax code in New Zealand?

A secondary tax code is a PAYE code used on income from a second job (or pension, student allowance, or other regular payment) when you already have a primary source of income. Because New Zealand has a progressive tax system, the secondary income is taxed at the rate that applies to the top slice of your total income across both jobs.

Will I always pay too much tax on a second job?

Not necessarily. If you choose the correct secondary tax code for your estimated combined income, the tax withheld should be close to your actual liability. The common misconception that a second job is always overtaxed arises from using the wrong code (SB or S when you should use SH or ST) rather than from the system itself. The IR3 year-end square-up corrects any difference.

Do I need to file an IR3 if I have a second job?

You are required to file an IR3 (individual income tax return) for any year in which you receive income from two or more sources (employers, payers, or self-employment). The IR3 calculates your total income and applies the correct tax rates, which may produce a refund or a bill depending on how accurately your tax codes matched your income throughout the year.

Source: IRD Tax codes for individuals 2026-27. General information only. Last updated 2026-11-04.