Two jobs in NZ: secondary codes and tailored tax codes

With two jobs, your main job uses M or ME and the second uses a flat secondary code: SB, S, SH, ST or SA, chosen by your combined income from both jobs. Because the flat rate hits every dollar of the second job, it often takes too much when your total sits just over a band boundary. A tailored tax code from Inland Revenue fixes that during the year, but it covers one employer for one tax year, cannot be backdated, and costs you the $50 write-off.

Choosing your secondary code

Add up what you expect to earn from all your jobs in the tax year, then pick the band that total falls into. These are the 2026/27 secondary codes from the IR330 tax code declaration (August 2026) and IRD's payroll specification.

Three rules that trip people up:

• Use your total income, not the second job alone. A $6,000 second job on top of a $50,000 main job is in the SH band, not SB.
• Only one main code at a time. Using M on both jobs gives each job the low bands, and the shortfall arrives as a bill.
• Student loan codes add 12% on every dollar. SB SL, S SL and the rest deduct a flat 12% repayment from all secondary pay, because the repayment threshold does not apply to secondary income.

Secondary tax is not a penalty or an extra tax. It is a withholding rate, and any over- or under-payment is squared up at the end of the year.

What each code takes from a $400 fortnight

Here is a second job paying $400 a fortnight in 2026/27, run through each secondary code with this site's PAYE engine. The ACC levy is the same whichever code you use; only the income tax changes.

On S SL the same $400 also has $48.00 of student loan taken, leaving $275.00. The gap between S and SH is $50 a fortnight, which is why the boundary matters. Check your own pay on the secondary tax calculator.

Worked example: when the right code still over-deducts

Aroha earns $50,000 a year in her main job on code ME and $6,000 in a second job. Her combined income is $56,000, so the IR330 puts her second job on SH. She has chosen correctly, and she is still over-taxed.

Why? The first $3,500 of her second job (taking her from $50,000 to $53,500) is still in the 17.5% band, so it costs 19.25% with the levy. Only the last $2,500 falls in the 30% band at 31.75%. SH charges 31.75% on all $6,000.

Neither standard code fits: SH holds back $437.50 of her money until her assessment from late May 2027, and S leaves her with a bill. A tailored tax code would set a rate close to her blended 24.5%, so tax is right as she goes. The exact rate depends on IRD's own calculation and her application.

What a tailored tax code is, and who can get one

The IR330 puts it simply: "A tailored tax code is a tax deduction rate worked out to suit your individual circumstances." IRD's IR23G guide (July 2024) says the standard codes "may not always deduct the right amount of tax", and gives examples of who might need one:

• people with a second job or other income apart from their main job;
• people with a taxable overseas pension;
• beneficiaries or ACC recipients who also work.

Contractors on the WT code have an equivalent, the tailored tax rate, for a rate below the 10% (or 15%) minimum. Some of those can be issued for up to 5 years depending on compliance history; see becoming a contractor.

Who cannot use one:

• businesses and organisations;
• a main benefit, except NZ Super and Veteran's Pension;
• anyone wanting to reduce student loan deductions. A tailored code no longer changes those; you need a special deduction rate instead.

How to apply, and the rules once you have one

Apply in myIR: open your income tax account, choose "More...", then "Tailored tax code application" under "Manage account", and pick the right tax year. Or post the IR23BS. Have your expected income from every job for the year ready.

IRD sends a letter and certificate "within 10 working days of receiving your application". Applications in February and March may take longer. Then:

1. Enter STC on a new IR330 for the job concerned and show the certificate to that employer. The IR330 says: "If you have a tailored tax code certificate, enter STC as your tax code on page 1, and show your certificate to your employer."
2. One certificate, one employer. If two jobs need tailoring, apply twice.
3. One tax year. It runs from 1 April to 31 March, and you reapply each year. IRD sends a renewal form before 20 February.
4. No backdating. "A tailored tax code or rate takes effect either from 1 April, or from the day we approve it. It cannot be backdated." Tax already over-deducted comes back at year end.
5. The IETC is built in. If you are entitled to it, the tailored code includes it, based on your application.

Weigh up one trade-off. If you use a tailored code at any time in the year, you lose the automatic write-off of tax bills of $50 or less, and the larger write-off for people on benefits or NZ Super. More on that in our guide to year-end refunds and bills. The tailored code is worth it when the over- or under-deduction is large, as in Aroha's case; for a few dollars it may not be.

ME, the IETC, Working for Families and NZ Super

The independent earner tax credit is for NZ tax residents earning $24,000 to $70,000 a year. The full $520 a year ($10 a week) applies from $24,000 to $66,000, then reduces by 13 cents for each dollar over $66,000, reaching nil at $70,000. These thresholds have applied since 31 July 2024 and are confirmed for 2026/27 in the IR340.

You claim it through code ME on your main job. On a $50,000 salary paid fortnightly in 2026/27, ME takes $308.18 of PAYE against $328.18 on M: $20 a fortnight more in your pocket.

With two jobs, the test is your total income. Aroha's $56,000 is inside the full-credit range, so ME on her main job is right as long as she gets no Working for Families, benefit or NZ Super.

You cannot have the IETC if:

• you or your partner are entitled to and receive Working for Families;
• you receive an income-tested benefit, NZ Superannuation, a Veteran's Pension or an overseas equivalent.

IR330 note 5 is blunt: in those cases "you must use tax code M or M SL ... You cannot use ME or ME SL." If you claim ME anyway, the credit is clawed back as a year-end bill.

The credit is worked out on whole months. Receiving an excluded payment at any time in a month removes the IETC for that whole month, so someone who starts NZ Super partway through the year can still get it for the months before.

If you get NZ Super and also work, NZ Super is usually your main income on M and your wages go on a secondary code. A tailored code can apply to NZ Super. Our guide to working past 65 covers that case.

Mistakes that turn two jobs into a tax bill

Most two-job tax problems come from a handful of avoidable slips. Check yours against this list before the year ends on 31 March 2027:

• Picking the secondary code from the second job alone. Someone earning $45,000 in a main job and $10,000 in a second job who chooses SB has $1,050.00 of income tax taken from the second job in 2026/27. The true tax on that $10,000 is $1,937.50, so the year ends with a bill of $887.50, well over the $50 write-off.
• Using M on both jobs. Each employer then gives you the lower bands, so far too little is deducted overall.
• Not updating the code when hours change. If your second job grows and your combined income crosses $53,500 or $78,100, the band changes too. Give that employer a new IR330.
• Treating a tailored code as permanent. It ends on 31 March. If you do not reapply, the employer has no current certificate for the new year.
• Expecting a tailored code to fix last year. It cannot be backdated. Past over-deductions only come back through your year-end assessment.
• Claiming ME while you or your partner receive Working for Families, or while you are on NZ Super or a benefit. The IETC is clawed back at year end.
• Expecting a tailored code to cut student loan deductions. It does not; that needs a special deduction rate.

If your hours are irregular and you cannot predict your total, pick the band you think is most likely and expect a small refund or bill. If the gap could be large, the tailored code is the tool built for it.

Questions people ask

How do I choose a secondary tax code?

Add up your expected income from all jobs for the tax year and pick the band that total falls into: SB to $15,600, S to $53,500, SH to $78,100, ST to $180,000, SA above. Use that code on the second job only.

How long does a tailored tax code last?

One tax year, from 1 April or the day IRD approves it to 31 March. You reapply each year, and IRD sends a renewal form before 20 February.

Can I backdate a tailored tax code?

No. It takes effect from 1 April or from the approval date. Tax already over-deducted is refunded after the year ends.

Do I need a tailored tax code for each job?

Yes. One certificate covers one employer, so a second employer needs a separate application.

Can I use ME if my partner gets Working for Families?

No. If you or your partner are entitled to and receive Working for Families, or you receive NZ Super or a main benefit, you must use M or M SL.