NZ tax codes explained: M, ME, S, SH, ST, SA, SL and ND

Every time you start a job in New Zealand you fill in a tax code declaration (the IR330) and write down a short code like M or SH SL. Those few letters decide how much tax your employer takes from every pay. Pick the right one and your pay is about right all year. Pick the wrong one and you either lend IRD money until after 31 March, or get a tax bill you weren't expecting.

This guide covers what each code means and how to work out yours. If you'd rather just get the answer, the free tax code calculator asks four questions and tells you.

First question: is this your main job?

Your main job is the one that pays the most. It gets a main code: M or ME. Every other job you have at the same time gets a secondary code.

The difference matters because they work in completely different ways:

• Main codes tax you on the normal sliding scale, starting at 10.5% on the first $15,600 and stepping up through 17.5%, 30% and 33% to 39% over $180,000.
• Secondary codes take one flat rate from every dollar of that job, because your main job has already used up the lower brackets.

Main job codes: M or ME

M is the standard code for your main job. Most people use it.

ME is the same as M, plus the independent earner tax credit (IETC). The credit is up to $520 a year (about $10 a week), taken off your tax a little each pay. You can use ME when all of these are true:

• your income for the year is between $24,000 and $70,000 (the full $520 is for $24,000 to $66,000, then it shrinks to nothing at $70,000)
• neither you nor your partner gets Working for Families
• you don't get NZ Super, a main benefit, a veteran's pension or a student allowance

If any of those rule you out, use M. Using ME when you're not entitled means the credit gets clawed back at the end of the year, so it's worth checking if your income is close to $70,000.

Second job codes: SB, S, SH, ST and SA

For a second job, the code comes from your total income for the year from all sources: your main job, this job and anything else that's taxed, added together. Not the second job on its own.

The ACC earners' levy (1.75% for 2026/27) comes off on top of these rates.

Example. You earn $50,000 in your main job and pick up a second job paying $10,000. Your total is $60,000, which is in the SH band, so the second job uses SH and takes 30%. A common mistake is to use S because the main job alone is under $53,500. That would take too little, and you'd owe the difference.

There's more on this, including why a second job can feel over-taxed, in second job tax in NZ.

Add SL if you have a student loan

If you have a New Zealand student loan, add SL to whatever code you use: M SL, ME SL, S SL, SH SL and so on. Your employer then takes 12% for loan repayments:

• On a main job code, the 12% is only on pay above the repayment threshold ($24,128 a year, about $464 a week).
• On a secondary code, it's 12% of every dollar, because the threshold has already been used by your main job.

If you're overseas-based, or IRD has given you a repayment deduction exemption, the rules are different: check with IRD.

The codes you hope not to need: ND and STC

ND (no declaration) is what your employer must use if you don't give them a tax code, or don't give them your IRD number. It takes 45% of your pay, plus the ACC levy. If you see ND on your payslip, fill in an IR330 and hand it in before the next payday. Overpaid tax comes back after the end of the tax year.

STC (special tax code), also called a tailored tax code, is a rate IRD sets for you when the standard codes would take noticeably too much or too little. It's most useful with a second job that straddles two tax brackets. You apply to IRD, and if it's approved you give your employer the certificate and write STC as your code.

What about contractors?

If you're paid as a contractor on schedular payments, you don't use M or S at all. You fill in a different form (the IR330C) and choose a withholding tax rate, code WT. The contractor calculator helps you work out how much to set aside.

What happens if I use the wrong code?

Nothing dramatic, but it shows up at the end of the tax year. After 31 March, IRD works out what you should have paid on your total income:

• If your code took too much, you get a refund, usually paid automatically.
• If it took too little, you get a bill. For a second job on the wrong secondary code this can be hundreds of dollars.

You can change your code at any time by giving your employer a new IR330. The new code applies from the next pay.

Quick checklist

1. Main job? Use M, or ME if you earn $24,000 to $70,000 and none of the exclusions apply.
2. Second job? Add up your total income from everything, then find the band in the table above.
3. Student loan? Add SL.
4. Unsure about a second job? Run it through the tax code calculator: it tells you the code and whether that code will take too much or too little.

Once your code is right, the take-home pay calculator shows what actually lands in your account each pay, and KeaBudget can plan your spending around it.

Figures are for the 2026/27 tax year (1 April 2026 to 31 March 2027), from IRD's published rates. This is general information, not tax advice.