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If you’re getting taxable income from more than 1 source, you may need to use a secondary tax code. This is because your extra earnings may have pushed you into a higher tax bracket.

Why there are secondary tax codes

Income sources could include pay, a benefit, pension or other taxable payment such as Student Allowance, an ACC compensation payment or paid parental leave.

Using the right tax codes ensures your payer deducts tax at the right rate for your total annual income. Each 'layer' of your income is taxed at a different rate. The higher layers are taxed at a higher rate than the lower layers.   

Tax rates for individuals 

Each payer has no way of knowing the total amount of income you’ll earn in a year. Using secondary tax codes lets your payer know the right amount of tax to deduct from your secondary source of income. 

This helps you pay the right amount of tax, so you don’t overpay during the year or end up with a tax bill at the end of the tax year (31 March). 

What happens at the end of the tax year

Find the right tax code

Follow the flowchart on pages 2 and 3 of the IR330 tax code declaration form to work out the right tax code to use.  

Complete my tax code declaration 

You can also use our tax rate calculator to see how your total annual income will be taxed.  

Tax rates for individuals 

Once you know the right tax code for an income source, give your payer a completed IR330 form so they can deduct the right amount of tax from your income. Payers do not need us to confirm your tax code information. 

When to use a secondary tax code

Every time you get a new source of income you must let your payer, such as an employer, know the right tax code to use for you.  

If you’re getting an income-tested benefit, NZ Super or Veteran’s pension, you’ll need to give MSD a tax code to use. If you're getting ACC payments, let ACC know. 

Additional sources of income

Tax codes cover a range of income, including pensions and other benefits. 

Types of individual income 

Secondary Income: know what to do Video information

Audio and visual transcript

Scene 1

Visual

We see the words 'Earning an additional income?'

Ivy and Rikki from Te Tari Taake Inland Revenue are speaking.

The words change to 'Secondary Income. Know what to do'.

Audio

Ivy

Kia ora, I’m Ivy.

Rikki

And I’m Rikki, from Inland Revenue Te Tari Taake.

Ivy

Tax can be complicated, so we’re here to tell you what to do if you earn an additional source of income.


Scene 2

Visual

Alex appears in-front of her work desk, with a roll of blueprints in her hand.

Audio

Ivy

Meet Alex, she earns $70,000 a year as an interior designer.


Scene 3

Visual

Alex now appears in an art gallery gesturing towards the art on the walls.

Audio

Rikki

She also works at a local art gallery, earning her another $5,000 a year.


Scene 4

Visual

Ivy and Rikki appear side by side with an A-frame board between them.

The board shows Alex's total income of $75,000, the tax code 'SH'. and the secondary tax rate of 30%.

Audio

Ivy

That brings her total annual income to $75,000.

Rikki

For her additional income, Alex uses the secondary tax code ‘SH’.

Ivy

With this code, Alex’s additional income gets taxed at 30%, which is just right for her total income.

Rikki

If either of Alex’s incomes change, she may need to switch to a different secondary tax code.


Scene 5

Visual

The camera zooms into the A-frame board, displaying the different tax brackets, codes, and rates.

Annual total income Secondary tax code Secondary tax rate
$15,600 or less SB 10.5%
Between $15,601 and $53,500 S 17.5%
Between $53,501 and $78,100 SH 30%
Between $78,101 and $180,000 ST 33%
Over $180,001 SA 39%

Audio

Ivy

It's key to remember, secondary tax rates are based on your total income to ensure you’re taxed correctly on every dollar.

Rikki

And don’t worry, using the right secondary tax code means you're not overpaying tax; it's about paying the right amount.


Scene 6

Visual

Ivy and Rikki are speaking side by side

Video closes with the Inland Revenue logo.

Audio

Ivy

So, stay on top of your situation, just like Alex. Use the right tax code and be sure you’re paying the right amount of tax during the year.

Rikki

And help avoid a potential bill.

Last updated: 30 Sep 2024
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