Secondary Tax Codes Explained: SB, S, SH, ST & SA (NZ)

If you’ve started a second job or a regular side gig, the form asks for a secondary tax code — SB, S, SH, ST or SA — and most people guess. Guess wrong and you either overpay all year or get a bill at the end. This guide explains exactly what each code means and how to choose the right one.

Why Secondary Codes Exist

Your main job uses a primary code (usually M or ME), which applies New Zealand’s progressive brackets starting from the lowest rate. If a second job also started from the bottom bracket, you’d get those low rates twice and end up under-taxed.

Secondary codes fix this. They apply a single flat rate to your second job that reflects where your total income already sits — so the extra income is taxed at roughly the right marginal rate instead of starting again from 10.5%.

The Five Secondary Codes

Add up the income you expect to earn across all your jobs for the year, then match that total to a band. Whichever band your total lands in is the code for your second job.

Code	Total income band	PAYE rate (incl. ACC levy)
SB	$0 – $15,600	12.25%
S	$15,601 – $53,500	19.25%
SH	$53,501 – $78,100	31.75%
ST	$78,101 – $180,000	34.75%
SA	Over $180,000	40.75%

The rates shown include the ACC earner’s levy, which is why they’re a little above the bare income-tax rates.

How to read it

The band is based on your combined income, but the code goes on the second job. So you’re asking: “Once you stack my second job on top of my first, what bracket is the top of my income in?” — and you use that code for the second job’s deductions.

Worked Examples

Example 1 — main job $48,000, side job $6,000. Total income is $54,000, which falls in the SH band ($53,501–$78,100). So the side job uses SH and has 31.75% deducted. That matches the fact those extra dollars sit just above the 30% bracket boundary, so there’s little or no surprise at year-end.

Example 2 — main job $40,000, weekend job $8,000. Total is $48,000, inside the S band ($15,601–$53,500). The weekend job uses S at 19.25%. Using SB here (because the weekend job alone is small) would under-tax it and create a bill.

Example 3 — two part-time jobs, $12,000 and $9,000. Total is $21,000, in the S band. The second job uses S. SB would have been wrong even though each job individually is under $15,600 — it’s the total that decides.

The Most Common Mistake

People pick a code based on what the second job pays, not their total income. A $6,000 side job feels tiny, so SB seems right — but if your total income is $90,000, the correct code is ST. Using SB means that side income is taxed at 12.25% when it should be 34.75%, and you’ll owe the gap when IRD reconciles your year.

The reverse also happens: someone on a modest total income uses SH or ST “to be safe” and overpays all year, getting it back only at assessment time.

Student Loans: Add SL

If you have a student loan, add the SL suffix to your secondary code — S SL, SH SL, ST SL, and so on. This deducts the 12% student loan repayment from your secondary income too. Forget the suffix and no loan repayment comes off that job, which can leave you behind on your loan.

What If You Get It Wrong?

Secondary codes are estimates, so they’re squared up at year-end:

• Code too low for your real total income → you’ll have tax to pay when IRD assesses you.
• Code too high → you’ll get a refund, but you’ve lent IRD money interest-free all year.

If your income is uneven, or a secondary code over-taxes you, you can apply to IRD for a tailored tax code that sets a rate matched to your actual situation.

Bottom Line

Choose your secondary code from your total expected income, not the size of the second job:

1. Add up all your jobs for the year.
2. Find the band: SB, S, SH, ST or SA.
3. Put that code on the second job — and add SL if you have a student loan.

Check the right code in seconds with our tax code checker. For the under-withholding trap in detail, see why a second job triggers an IR3 tax bill, and for primary codes, tax codes explained.