NZ tax codes explained
Your tax code tells your employer how much PAYE to deduct. The wrong code doesn't change what you owe, but it can quietly over-tax you all year until a refund arrives (or worse, under-tax you until a bill does).
Main employment codes
| Code | Who it's for |
|---|---|
| M | Your main job, no student loan, the default for most people |
| ME | Main job and eligible for the Independent Earner Tax Credit |
| M SL / ME SL | As above, with a student loan (adds 12% over $464/week) |
The ME code and the $520 credit
Earning between $24,000 and $70,000 with no main benefit, Working for Families or NZ Super? The IETC gives you up to $520 a year ($10 a week), built into your PAYE when you use ME. It phases out at 13 cents per dollar above $66,000. If you are eligible but use plain M, you only see the money at year-end assessment.
Secondary job codes
Second jobs use SB (combined income ≤ $15,600), S (≤ $53,500), SH (≤ $78,100), ST (≤ $180,000) or SA (above). The code taxes every dollar of the second job at your top bracket rate, correct in total, but if the second job straddles a bracket you'll over-pay slightly; a tailored tax code from IRD fixes that.
Special codes
WT is schedular withholding for contractors: each activity has a standard rate, and on the IR330C you can choose your own rate, at least 10% (15% for non-residents on a temporary visa), or 45% applies if you give no IR330C. ND is the 45% no-notification rate when you never gave your employer a code, if you see 45% deductions, that's why. CAE covers casual agricultural work.
Check, don't guess
IRD's myIR shows the code each employer uses for you. To see what the right code should produce in dollars, run your salary through the PAYE calculator with the IETC box on and off, the difference is exactly what ME is worth to you.
Frequently asked questions
What is the difference between tax codes M and ME in New Zealand?
Both apply to your main job, but ME also activates the Independent Earner Tax Credit (IETC) worth up to $520 a year. The credit is built into your PAYE so you do not have to wait until year-end to receive it.
Which secondary tax code should I use for a second job in New Zealand?
Secondary codes depend on combined income: SB for total income up to $15,600, S up to $53,500, SH up to $78,100, ST up to $180,000, and SA above that.
What is the ND tax code and why does it deduct 45%?
ND is the no-declaration rate applied when you give your employer no tax code. The 45% rate is the highest withholding rate, so providing a completed IR330 as soon as possible prevents significant over-taxation.
Sources: IRD tax code declaration (IR330) and individual tax rates. Last updated 2026-11-04.