Tax codes help your employer or payer work out how much tax to deduct from your pay (including ACC), benefit or pension. It's your responsibility to tell your employer your tax code.
You choose your tax code
You need to work out your tax code for each source of income you receive. Your employer cannot choose a tax code for you.
Tell your employer or payer what your code is otherwise they will tax you at the higher non-declaration rate of 45%.
You need to tell your employer or payer if your tax code changes.
How to choose your tax code
You need a tax code if you receive salary, wages, an income-tested benefit or other income which has tax taken out before you get paid. Your tax code might be different for different types of income.
When you work out your total income from all sources, do not include any losses you may be carrying forward from the last tax year. The tax year is from 1 April to 31 March.
Your tax code depends on your situation
Your tax code may reflect
- the type of work you're doing
- if you have a student loan
- if you have more than 1 source of income
These details all help to make sure that you do not overpay your tax during the year. They also help to make sure that you do not get a bill at the end of the year.
Your main income
You have 1 tax code for your main income. The code you use depends on the type and amount of your main income.
Your secondary income
If you have more than 1 source of income you use a secondary tax code for your other income.
Secondary tax codes and rates from 1 April 2021
| Estimated annual total income from all sources | Secondary tax code for the second source of income | Secondary tax rate (before ACC levies) |
|---|---|---|
| $14,000 or less | SB | 10.5% |
| Between $14,001 and $48,000 | S | 17.5% |
| Between $48,001 and $70,000 | SH | 30% |
| Between $70,001 and $180,000 | ST | 33% |
| Over $180,000 | SA | 39% |
Student loan borrowers
If you have a student loan you use a tax code that tells your employer to deduct your repayments.
Once you've paid off your loan you need to choose a new tax code and tell your employer.
Dividends and interest
You do not need a tax code for dividends or interest. Your payer will deduct resident withholding tax (RWT) for you.
Resident withholding tax (RWT)
ACC payments
If you’re getting ACC you use a tax code just as you would with any other source of income. Depending on how much you’re getting, ACC could be your main or secondary source of income.
Your tax code with your employer may change depending on how much ACC pays you.
Schedular payments
Use the WT tax code for income from schedular payments.
Casual agricultural work
Use the CAE tax code if you are only doing casual agricultural work.
Casual agricultural workers do casual seasonal work on a day-to-day basis for up to 3 months. They earn no other income in this time. This group includes shearers and shearing shed-hands.
Recognised seasonal worker
Use the NSW tax code if you’re a recognised seasonal worker, or hold a work visa as foreign crew of a vessel fishing New Zealand waters.
Helping with election day work
Use the EDW tax code for income from work in New Zealand for voting for an election. The EDW tax code covers the 2-week period of advanced voting and election day. If you are working on the election outside this period use the tax code most appropriate to your income circumstances as set out in the IR330.
We might change your tax code
If we see that you're using an unsuitable tax code, we may suggest you change it or apply to us for a tailored tax code. If you're using the wrong tax code, such as using the M tax code on 2 sources of income at the same time, we'll ask your employer or payer to change it. We'll notify you when we do this. We do this to help you avoid getting a bill at the end of the tax year or to stop you paying more tax than you should during the year. Talk to us if you disagree with our decision to change your tax code.
Tailored tax options
Tailored tax options help you pay the right amount of tax if your circumstances mean you often have a large tax bill or refund.
Which tailored tax option is right for me?
If you receive NZ Super
If you receive NZ Super, you can change your tax code through the Ministry of Social Development's website.