Second Job Tax in NZ: How Secondary Tax Works and What You’ll Actually Take Home
Your second job doesn’t get taxed at a higher rate than your first — but it does start being taxed at a flat rate immediately, based on your combined income across both jobs, rather than starting again from New Zealand’s lowest tax bracket. This is why a second job’s pay often looks more heavily taxed than your main job, even though your total tax bill is correct.
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Why Second Jobs Feel More Heavily Taxed
Your main job uses a primary tax code (usually M or ME) and applies New Zealand’s progressive tax brackets starting from the lowest rate (10.5%) upward. If your second job also started from the bottom bracket, you’d effectively get the low rate twice — once for each job — and end up under-taxed overall, leading to a bill at year-end.
To prevent this, your second job uses a secondary tax code — a flat rate chosen so the extra income is taxed at roughly the correct marginal rate your combined income already sits in.
The Five Secondary Tax Codes
| Code | Combined Annual Income (Both Jobs) | Secondary Tax Rate |
|---|---|---|
| SB | $0 – $15,600 | 10.5% |
| S | $15,601 – $53,500 | 17.5% |
| SH | $53,501 – $78,100 | 30% |
| ST | $78,101 – $180,000 | 33% |
| SA | Over $180,000 | 39% |
Source: Inland Revenue, 2026/27 tax year. Add “SL” to any code if you have a student loan — this adds a 12% student loan repayment deduction on top, from the first dollar of the secondary job’s earnings.
How to Work Out Your Own Secondary Tax Code
- Estimate your total annual income from all jobs combined — not just the second job’s income
- Find which band that combined total falls into using the table above
- That’s the code that goes on your second job, not your first
Example: You earn $50,000 a year at your main job and pick up a weekend job earning an extra $10,000 a year. Your combined income is $60,000, which falls in the $53,501–$78,100 band — so your second job uses the SH code, even though the second job alone only earns $10,000.
Why This Matters for Your Hourly Rate
If you’re working a second job at, say, $25/hour, and your combined income pushes you into the SH band, roughly 30% comes straight off that $25/hour in secondary tax — before ACC and KiwiSaver are even factored in. That means your effective take-home rate on the second job could be closer to $17–$18/hour, even though the first job’s income might still be taxed at a lower blended rate overall. This is a common source of confusion — and disappointment — for people taking on side work.
Getting the Wrong Code: What Happens
Using the wrong secondary code doesn’t change how much tax you ultimately owe — Inland Revenue reconciles your actual tax liability at year-end based on total income. But it does affect your cash flow through the year:
- Too low a code (e.g. using S when you should use SH) → you’ll be under-taxed through the year and may face a bill after your end-of-year assessment
- Too high a code (e.g. using ST when SH applies) → you’ll be over-taxed through the year and receive a refund, but you’ve effectively given IRD an interest-free loan in the meantime
Since 2019, Inland Revenue has actively monitored PAYE across multiple jobs and can proactively suggest a more suitable tax code if it looks like you’re being over-taxed — a change specifically introduced to reduce unnecessary secondary tax burden.<sup>[3]</sup>
Should You Ask for a Tailored Tax Code Instead?
If your income situation is unusual — highly variable second-job hours, multiple casual roles, or seasonal work — you can apply to Inland Revenue for a tailored tax rate for your salary or wages, rather than relying on the standard secondary codes. This requires an application and IRD approval, but can better reflect genuinely irregular income patterns.
What This Looks Like in Real Numbers
| Job | Hourly Rate | Hours/Week | Tax Code | Approx. Effective Tax Rate |
|---|---|---|---|---|
| Main job | $28/hour | 40 | M | Progressive, 10.5%–17.5% blended |
| Second job | $25/hour | 10 | SH (if combined income $53,501–$78,100) | 30% flat, plus ACC |
In this example, the second job’s $25/hour effectively becomes roughly $17.50/hour after the 30% secondary rate, before ACC is even applied — worth knowing before you commit to the extra hours.
Check Your Exact Numbers
Because secondary tax depends on your combined income across all jobs, a generic single-job calculator won’t give you an accurate answer. Use the NZ PAYE Calculator to model your main job and second job together, and convert any second job’s hourly rate into a real annual figure first with the Hourly to Salary Calculator.
Frequently Asked Question
Do I pay more total tax because I have a second job?
No — your total tax liability is based on your combined annual income regardless of how many jobs you have. The secondary tax code just changes when and how that tax is collected through the year.
What tax code should I use for my second job?
Add up your expected income from all jobs, then match that combined total to the SB/S/SH/ST/SA bands above — the code goes on your second (lower-priority) job.
Will I get a tax bill at the end of the year if I use the wrong code?
Possibly — if your secondary code under-withholds relative to your actual combined income, Inland Revenue’s end-of-year assessment may show a balance owing. Using the correct code from the start avoids this.
Does secondary tax apply to casual or occasional work too?
Yes — any employment beyond your main job, including casual or occasional work, is generally taxed using a secondary code based on your combined expected income.
Can you have two jobs in New Zealand?
Yes. You can legally have two or more jobs in New Zealand. If you have multiple employers, you generally need to use the appropriate tax code for your income from each job. Your secondary job may have tax deducted using a secondary tax code, depending on your total income and circumstances.
Do you pay more tax on a second job in NZ?
You may have a higher percentage of tax deducted from your second job, but this does not necessarily mean that your second income is taxed unfairly. New Zealand uses progressive income tax rates, so the tax rate applied to your secondary income depends on your total taxable income and the applicable tax code. The secondary tax system helps employers deduct an appropriate amount of PAYE from additional employment income.
How do I calculate my secondary tax in New Zealand?
To calculate secondary tax in New Zealand, you need to consider your expected income from all jobs, your secondary tax code, and other applicable deductions. You can use an NZ PAYE calculator to estimate PAYE and your take-home pay from your employment income. For an accurate estimate, enter your income frequency, earnings, tax code, KiwiSaver contributions, and other relevant deductions.
