Secondary Tax
If you have more than one job or income source, your secondary employer deducts tax using a secondary tax code. Secondary tax codes are designed to collect tax at your correct marginal rate, since your primary job income has already used up your lower tax brackets.
Common secondary tax codes include: S (income up to $15,600), SH (income $15,601–$53,500), ST (income $53,501–$78,100), SA (income $78,101–$180,000), and SAA (income over $180,000). The appropriate code depends on how much you expect to earn from the secondary job.
Secondary tax is not an additional or higher tax — it simply ensures the right amount of tax is collected across both jobs so you don't get a surprise tax bill at year end. If the wrong code is used, it will be corrected in your end-of-year assessment. Since 2021, the 'tailored tax code' system allows more precise deduction rates for people with multiple jobs.
Related Terms
Tax Code
A tax code is a code you provide to your employer (on an IR330 form) that determines how PAYE is calculated on your pay.
PAYE
PAYE (Pay As You Earn) is the system that New Zealand employers use to deduct income tax from employees' wages and salaries.
Marginal Tax Rate
Your marginal tax rate is the tax rate that applies to your next (or last) dollar of income — in other words, the rate of the highest tax bracket you fall into.
Try the calculator
Use our free tool to see how secondary tax affects your tax.