Secondary Tax Calculator NZ 2026–27

Secondary tax rates NZ 2026–27

Secondary tax codes are flat rates. Each one matches a band of the ordinary income tax scale, and you pick the band that your estimated total annual income from all sources falls into, main job included. Inland Revenue's table lists the rate before the ACC earners' levy. Payroll then adds the levy, 1.75% in 2026–27, so the amount actually taken from each dollar is the "with ACC" column. The last two columns show a $500 weekly pay from a second job.

How much is secondary tax?

There is no tax-free amount and no annualising on a secondary code. Payroll drops the cents from your gross pay and multiplies the whole dollars by the flat rate plus the levy. That is how Inland Revenue's 2026–27 payroll specification sets it out (section 5.6). A $300 weekly pay on S therefore loses $57.75 whether it is your first week or your fiftieth.

Take the calculator's default: $60,000 from a main job plus $300 a week ($15,600 a year) from weekend work. Total income is $75,600, which falls in the $53,501 – $78,100 band, so the right code is SH. Each pay loses $90.00 in tax and $5.25 in levy, leaving $204.75. Over the year $14,901 of income tax is deducted across both jobs against $14,901 due, so the year ends all square.

If the same person picked S because the second job is small, only $57.75 a week would come off. That looks better on payday but leaves $1,950 to pay when Inland Revenue squares up the year after 31 March.

Which secondary tax code should I use?

Inland Revenue's rule is short: "You only have 1 main income, which is your highest income source." All other income is secondary. You then work through three steps, the same ones in the flowchart on the Tax code declaration (IR330):

• Main income: give your highest-paying employer M, or ME if your total income will be $24,000–$70,000 and you get no Working for Families, NZ Super or main benefit.
• Estimate your total income for the tax year from every source: all jobs, benefits, NZ Super, ACC weekly compensation and taxable overseas income.
• Give each other employer the secondary code for that total: SB up to $15,600, S to $53,500, SH to $78,100, ST to $180,000, SA above. Add SL if you have a student loan.

Secondary tax code examples

The code depends on the total, not on how much the second job pays. These combinations show the code each one points to for the second job.

Why not use M on both jobs?

Code M assumes the job is your only income, so each employer taxes its pay from the bottom of the scale and uses the 10.5% and 17.5% bands again. With $40,000 and $20,000 both on M, the two employers deduct $8,316 of income tax in total. The tax on $60,000 is $10,221, so a bill of about $1,905 arrives after 31 March. A secondary code avoids this by taxing the second job at the rate your top dollars actually reach.

When a tailored (special) tax code makes sense

A secondary code taxes every dollar of the second job at the rate of the band your total ends in, even if part of that job sits in a lower band. With $50,000 from a main job and $20,000 from a second, the total is $70,000, so the code is SH at 30%. But the first $3,500 of the second job is really in the 17.5% band. SH over-deducts and the year ends with a refund of about $428. The calculator shows the flat rate that would have been exact, here 29.56% including the levy.

A tailored tax code fixes that during the year instead of at the end. Inland Revenue now calls it a tailored tax code; payroll systems still use the code STC, and many people know it as a special tax code. Apply in myIR (income tax account, "More…", then "Tailored tax code application") or on the IR23BS form. Inland Revenue aims to send a letter and certificate within 10 working days, longer in February and March. The certificate gives a rate in cents per dollar that already includes the ACC levy, so pick "STC" in the calculator and enter that rate. It lasts until 31 March at most, so you reapply each year.

Secondary codes with a student loan (SB SL to SA SL)

On a main job, student loan repayments are 12% of pay above the repayment threshold ($24,128 a year). On a secondary code there is no threshold, because the main job has already used it. A $200 weekly pay on S SL loses $24.00 to the loan on top of $38.50 of PAYE. If your main job pays less than the threshold, Inland Revenue can issue a special deduction rate certificate below 12%.

Secondary tax and the ACC levy

Every secondary code adds the 1.75% levy with no cap inside the pay. The yearly maximum applies to your combined earnings: $156,641, a levy of $2,741.22. If your jobs together earn more than that, more than the maximum is deducted. Check the totals in your myIR income summary and ask Inland Revenue about the excess. The calculator shows that amount separately from the income tax refund.

Changing your secondary code during the year

Fill in a new IR330 and give it to the employer whenever your expected total moves into another band: a pay rise, more hours, a third job or the end of the main job. Payers do not need Inland Revenue to confirm the code. The tax already deducted stays as it is, and any shortfall or excess is settled in your assessment. Thresholds have not changed since 31 July 2024, so the bands in 2025–26 and 2026–27 are the same.