New Zealand Tax Codes Guide 2026
A plain-English guide to NZ tax codes for 2026/27, including M, ME, secondary tax codes, student loan codes, IR330 forms and common mistakes.
Updated for the 2026/27 tax year | Rates checked against IRD tax code guidance
What is a tax code and why does it matter?
A tax code tells your employer how much PAYE to deduct from your pay. Get it right and you pay the correct tax as you go. Get it wrong and you either owe IRD money at the end of the year - or you overpay and have to claim it back.
You provide your tax code when you start a new job by filling out an IR330 tax code declaration. If you don't hand one in, your employer must deduct tax at the no-notification rate of 45% - the highest possible rate.
> Example: Sarah starts a new job and forgets to hand in her IR330. Her first two paycheques have 45% deducted. She hands in the form on week three - her employer updates the code going forward, and IRD squares up the overpayment at year end.
Every NZ tax code explained
| Tax code | Who it's for |
|---|---|
| M | Your primary job - no student loan |
| ME | Primary job - you're eligible for the Independent Earner Tax Credit |
| S | Secondary job - total annual PAYE income will be $15,601 to $53,500 |
| SB | Secondary job - total annual PAYE income will be $15,600 or less |
| SH | Secondary job - total annual PAYE income will be $53,501 to $78,100 |
| ST | Secondary job - total annual PAYE income will be $78,101 to $180,000 |
| SA | Secondary job - total annual PAYE income will be over $180,000 |
| WT | Schedular payments, usually for contractors paid by withholding tax |
| CAE | Casual agricultural workers |
| EDW | Election day workers |
| NSW | Recognised seasonal workers |
| STC | Tailored tax code issued by IRD |
If you have a student loan, add SL to your code - for example M SL or S SL. This triggers the 12% student loan repayment deduction on income above the repayment threshold.
> Example: Ben works full-time at a cafe earning $42,000 a year. No student loan. His tax code is M. His flatmate James earns the same amount but has a student loan - his code is M SL.
How to find your correct tax code
For most people it's straightforward:
- One job, no student loan -> M
- One job, student loan -> M SL
- Eligible for IETC, no student loan -> ME
- Eligible for IETC, with student loan -> ME SL
- Second job or income source -> use an S code (SB, S, SH, ST, or SA depending on your total annual PAYE income)
The Independent Earner Tax Credit applies if your total income is between $24,000 and $70,000 and you are not receiving Working for Families or a main benefit. The full $520 credit applies up to $66,000, then reduces until it disappears at $70,000.
If you're unsure which secondary code applies, add up your expected PAYE income from all jobs for the year and match that total to the S code bands in the table above.
> Example: Amy works part-time earning $18,000 a year as her only income. She uses M. Midway through the year she picks up a second part-time job. Her combined PAYE income will be around $30,000 - so her second job uses S, not M.
IRD also has a tax code finder tool if you want to confirm.
What happens if you use the wrong tax code
Under-deduction - if you use a code that deducts too little tax, you'll have a bill to pay at the end of the year. This catches people out most often when they forget to switch from M to an S code on a second job.
Over-deduction - if you use a code that takes too much, you'll get a refund - but you've effectively given IRD an interest-free loan in the meantime.
No tax code at all - if you don't provide an IR330, your employer deducts 45% until you do. Fix it immediately by handing in the form.
> Example: Tom has a full-time job earning $52,000 and picks up weekend work earning $12,000. He puts M on both jobs. IRD calculates his total income at $64,000 at year end - and he gets a tax bill because his weekend job income was taxed as if it were his only income, at too low a rate.
If you realise you've been on the wrong code, you can update it at any time by giving your employer a new IR330. You can't backdate it through payroll, but IRD will square up any underpayment or overpayment when your end-of-year assessment is processed.
Secondary income tax codes explained
If you have a second job or another PAYE income source on top of your main job, you cannot use the M code for it. M is for your primary income only.
The S codes exist because your secondary income gets stacked on top of your primary income for tax purposes. By the time you earn your first dollar from a second job, you've already used up some or all of your lower tax brackets. The S code ensures the right rate is applied from the start.
Which S code to pick comes down to your total annual PAYE income across all PAYE sources:
- $15,600 or less -> SB
- $15,601 to $53,500 -> S
- $53,501 to $78,100 -> SH
- $78,101 to $180,000 -> ST
- Over $180,000 -> SA
> Example: Ben earns $55,000 from his main job. He starts a second PAYE job and expects to earn around $10,000 from it this year. Combined that's $65,000 - so his secondary income uses SH, not S.
When in doubt, pick the code above where you think you'll land rather than below. It's easier to get a small refund than to owe money.
FAQs
What's the most common tax code in NZ?
M - it covers anyone in their primary job without a student loan and without the Independent Earner Tax Credit in their PAYE code.
What is the ME tax code?
ME is the same as M but triggers the Independent Earner Tax Credit, worth up to $520 a year. You may qualify if your income is between $24,000 and $70,000 and you're not receiving Working for Families or an income-tested benefit.
> Example: Lisa earns $45,000 at her primary job, has no student loan, and doesn't receive Working for Families. She switches from M to ME - and IRD applies the $520 credit across her pay periods rather than waiting until year end.
What happens if I don't give my employer a tax code?
They must deduct PAYE at 45%. Hand in an IR330 as soon as possible.
Can I change my tax code mid-year?
Yes, at any time. Give your employer a new IR330 and they'll update it from the next pay period.
Do I need a different tax code for a rental property?
No - rental income is handled separately through your end-of-year tax return, not through a payroll tax code.
What's the difference between M and ME?
The only difference is the IETC. ME instructs payroll to apply the Independent Earner Tax Credit during the year. If you're eligible, use ME - it means slightly less tax deducted each pay period rather than waiting for a lump sum at year end.
What does SL mean on a tax code?
Student loan. Add SL to your base code - M SL, S SL, SH SL, and so on - and your employer will deduct student loan repayments automatically when your pay is above the repayment threshold.
Work out your take-home pay
Now you know your tax code - see exactly what lands in your account using the TaxPop PAYE Calculator. Plug in your hourly rate or salary, select your tax code, and it handles the rest.
Also useful: NZ Income Tax Calculator and the NZ Minimum Wage page if you want to check rates and take-home together.
Information sourced from IRD. Last updated for the 2026/27 tax year.