Secondary Tax in New Zealand

What a second job actually costs, why the rate is flat, and the two things that make it look like a penalty when it is not. Rates are current for the 2026–27 tax year.

Secondary tax is a flat rate on every dollar your second job pays: 12.25%, 19.25%, 31.75%, 34.75% or 40.75%, including the 1.75% ACC earners' levy. You pick the code from your total income across every source, not from what the second job pays.

How much is secondary tax in New Zealand?

There are five secondary codes and each one is a single flat rate applied from the first dollar. The rate your employer deducts is two figures added together, and almost every site publishes one of them while labelling it the other. The table below separates them.

Secondary tax codes, showing the income tax and ACC levy components separately
Code	Total income from all sources	Income tax	ACC levy	Deducted
SB	Total income up to $15,600	10.5%	1.75%	12.25%
S	$15,601 – $53,500	17.5%	1.75%	19.25%
SH	$53,501 – $78,100	30%	1.75%	31.75%
ST	$78,101 – $180,000	33%	1.75%	34.75%
SA	$180,001 and over	39%	1.75%	40.75%

The last column is what leaves your pay. The middle two are what it is made of. If you have ever compared a payslip against a rate table and found it 1.75% out, that is the reason. The ACC earners' levy is charged on secondary income exactly as it is on your main job.

30%income tax

1.75%ACC earners' levy

31.75%deducted on code SH

SH is the most common secondary code, because it covers total incomes from $53,501 to $78,100. Add a student loan and the same job loses 43.75%.

Secondary tax is not a penalty

The rate looks punishing because it starts at your marginal rate instead of climbing to it. Your main job has already used the 10.5% band on your first $15,600 and the 17.5% band after that. There are no cheap bands left for the second job to use, so it is charged at the rate your income has already reached.

Take $62,000 from one job and $9,000 from another. The total is $71,000, so the second job is coded SH. Income tax across the two jobs comes to $13,520.50. The same $71,000 earned from a single employer attracts $13,520.50. The ACC earners' levy of $1,242.50 is the same either way, because it is charged on your earnings rather than on your arrangement of jobs.

What does cost money is the wrong code. Coding that same $9,000 as SB, because $9,000 looks like a small income on its own, withholds $11,765.50 of income tax across the year instead of $13,520.50. The $1,755.00 difference is not forgiven. It is simply not collected until Inland Revenue asks for it after 31 March.

On a second job, student loan has no threshold at all

This is the most miscalculated number on a New Zealand payslip. The $24,128 a year repayment threshold ($464.00 a week) belongs to your main job only. Attach an SL suffix to a secondary code and payroll deducts 12% of every dollar, starting at the first one.

A $400.00 weekly shift on your main job attracts $0.00 of student loan. The same $400.00 from a second employer attracts $48.00. That is why an SH SL second job loses 43.75% of its gross before KiwiSaver is even considered. The SL suffix in full.

What your second job actually pays

Income from this job

Tax code

SH$53,501 – $78,100

Your result

Gross: $70,000.00
PAYE tax: − $21,000.00
ACC levy: − $1,225.00
KiwiSaver: − $2,450.00
Take-home: $45,325.00

You keep 64.8% of your gross pay.

Enter what the second job pays. The rate shown already contains the 1.75% ACC earners' levy, and KiwiSaver is at the 3.5% default. Change the code by opening the page for the code your total income puts you in.

Example 1. $400.00 a week from a second job on SH

1.Gross pay from this job for the week$20,800 a year from this job alone$400.00
2.PAYE at 31.75%30% income tax with the ACC earners' levy already inside it− $127.00
3.KiwiSaver at 3.5%− $14.00
Into your account$259.00

Example 2. The same $400.00 a week on SH SL

1.Gross pay from this job for the week$20,800 a year from this job alone$400.00
2.PAYE at 31.75%30% income tax with the ACC earners' levy already inside it− $127.00
3.Student loan at 12%Every dollar. The repayment threshold belongs to your main job− $48.00
4.KiwiSaver at 3.5%− $14.00
Into your account$211.00

The only difference between the two is the student loan line, and it is $48.00 a week because every dollar counts. Across a year that second job pays $20,800 and hands over $9,100 of it. Both examples assume the 3.5% KiwiSaver rate.

A secondary code is the wrong code for you if…

This is now your highest-earning job. Jobs swap places when hours change. The main-income code follows the money, so give this employer M or ME and put the secondary code on the other one.
You picked the code from this job's pay. The band is read off your totalincome. Using the second job's own income almost always lands you one or two codes too low.
Your two jobs are the only income and one has ended. A secondary code on your only remaining job over-withholds every payday until you change it.
You invoice for the second job rather than being on payroll. That is a schedular payment on WT, where you elect your own rate.
No standard code gets close, because your hours swing wildly. That is what a special tax code (STC) exists for. Inland Revenue sets a rate for your circumstances.

What happens at the end-of-year square-up

After 31 March, Inland Revenue adds every job together and taxes the total through the progressive bands, exactly as though one employer had paid you all of it. Then it subtracts everything that was withheld. Secondary tax never survives that process as a separate thing. It is only a way of collecting during the year.

Refunds are common on secondary income for one reason: a flat rate cannot know when your second job stopped, or that you only worked ten weeks of the year. Your code was chosen on a forecast total of $71,000, and if the year finished lower, part of every deduction was never due. That surplus comes back as a refund.

Bills come from the opposite error, and they are larger than people expect because the shortfall compounds across every payday. Two jobs both on M is the worst case, since each employer applies the 10.5% and 17.5% bands to the same income. Choosing SB when the total says tax code SH is the second worst. changing your tax code fixes the future without touching the past, and the past is settled in the assessment.

Common questions

How much is secondary tax in NZ?

A flat rate on every dollar the second job pays. 12.25% on SB, 19.25% on S, 31.75% on SH, 34.75% on ST and 40.75% on SA. Each already contains the 1.75% ACC earners' levy. The code comes from your total income, not from what the second job pays.

Is secondary tax higher than normal tax?

No. The right secondary code produces almost exactly the tax that the same total would attract in one job. It feels higher because your main job has already used the 10.5% and 17.5% bands, so every dollar of the second job is taxed at your real marginal rate from the first dollar.

Do I get secondary tax back at the end of the year?

Only if too much came out. After 31 March, Inland Revenue adds your jobs together, works out the tax genuinely due and compares it with everything withheld. Too high a code gives a refund, too low a code gives a bill. There is no separate pot of secondary tax to reclaim.

How do I choose between SB, S, SH, ST and SA?

Add up everything you expect to earn this year from every source, then take the code whose band that total lands in. A $9,000 weekend job attached to a $62,000 salary is coded on the $71,000 total, which is SH, not on the $9,000. what tax code am I.

Can I use tax code M on both of my jobs?

No. M belongs to one job. Used twice, each employer gives you the low bands as though the other did not exist, so you are under-taxed all year and get a bill after 31 March. tax code M.

How much student loan comes out of a second job?

12% of every dollar, with no threshold. The $24,128 a year threshold belongs to your main job only, which is why an SH SL second job loses 43.75% of its gross. The SL suffix explained.

Where these figures come from

2026–27 tax year (1 April 2026 – 31 March 2027). Last verified 30 July 2026.

Tax code S. 19.25%$15,601 – $53,500
Tax code SH. 31.75%$53,501 – $78,100
what tax code am IFive questions, one answer
the student loan suffix12% of every dollar on a second job
the New Zealand tax year1 April to 31 March, and what the square-up settles
New Zealand tax codesEvery code and rate in one table