Second job tax in NZ: why it feels high and how to get it right
Why a second job seems to lose so much to tax, how to pick the right secondary code from your total income, and when a tailored tax code saves you waiting for a refund.
By KeaBudget · general information, not financial advice
You take on a second job, the first payslip arrives, and a surprising chunk has gone to tax. It's one of the most common money questions in New Zealand: is my second job being over-taxed?
Sometimes it is, sometimes it isn't, and sometimes it's being under-taxed and you'll find out after 31 March. Here's how it works, and how to check yours.
Why a second job is taxed differently
New Zealand taxes income on a sliding scale:
| Income | Rate |
|---|---|
| up to $15,600 | 10.5% |
| $15,601 to $53,500 | 17.5% |
| $53,501 to $78,100 | 30% |
| $78,101 to $180,000 | 33% |
| over $180,000 | 39% |
Your main job uses that whole scale. But your second employer has no idea what you earn elsewhere, so they can't work out where on the scale your extra pay lands. Instead, the second job uses a secondary tax code that takes one flat rate from every dollar.
The flat rate is meant to match the bracket your extra income falls into. When it does, the tax is right. When your second job straddles two brackets, it isn't quite.
Step 1: pick the code from your total income
The secondary code comes from your estimated total income for the year from all sources: main job plus second job plus anything else taxed. Not the second job alone, and not the main job alone.
| Code | Total income, all sources | Flat rate |
|---|---|---|
| SB | up to $15,600 | 10.5% |
| S | $15,601 to $53,500 | 17.5% |
| SH | $53,501 to $78,100 | 30% |
| ST | $78,101 to $180,000 | 33% |
| SA | over $180,000 | 39% |
The ACC earners' levy (1.75%) comes off on top. With a student loan, add SL and 12% comes off every dollar of the second job too.
Step 2: check whether the flat rate fits
Here are two real examples, using 2026/27 rates.
A second job that's taxed about right. Your main job pays $30,000 and the second pays $8,000. Your total is $38,000, so the code is S at 17.5%. Every dollar of the second job really does fall in the 17.5% bracket (between $30,000 and $38,000), so the flat rate takes $1,400, which is exactly the real tax. No refund, no bill.
A second job that's over-taxed. Your main job pays $50,000 and the second pays $10,000. Your total is $60,000, so the code is SH at 30%. It takes $3,000 in tax from the second job. But look at where those dollars really land:
- the first $3,500 (from $50,000 to $53,500) is in the 17.5% bracket: $612.50
- the other $6,500 (from $53,500 to $60,000) is in the 30% bracket: $1,950
So the second job really adds $2,562.50 to your tax bill, and SH takes about $438 too much. You get it back as a refund after 31 March. That's the "my second job is over-taxed" feeling, and it's real.
The tax code calculator runs this check for you: choose "second job", enter your total income and this job's pay, and it tells you whether the code takes too much, too little or about the right amount.
The mistake that leads to a tax bill
The expensive mistake goes the other way: choosing the code from your main job alone. In the example above, the main job ($50,000) is under $53,500, so it's tempting to use S at 17.5%. S would take only $1,750 from the second job, about $813 too little, and IRD sends a bill after the end of the tax year.
If you're not sure, it's better to be a little over than under. A refund turns up on its own; a bill needs paying.
Can I stop being over-taxed each pay?
Yes. If the standard code would take noticeably too much, you can apply to IRD for a tailored tax code (shown on your IR330 as STC). IRD works out a rate that fits your actual situation. Once it's approved, you give your second employer the certificate and the right amount comes off as you go, instead of waiting for a refund.
It's most worth doing when the difference is a few hundred dollars or more, or when your income has changed partway through the year.
Other things worth knowing
- Which job is "main"? The one that pays the most. If your two jobs swap places (say you cut back hours in one), change both codes with a new IR330.
- Student loan on a second job is 12% of every dollar, with no threshold. The threshold has already been used by your main job.
- No IR330 at all means code ND and 45% tax on that job. Hand one in before the next payday.
- A side hustle where you invoice people isn't a second job: no employer takes tax, so you need to set it aside yourself and file a tax return.
- Your income guess doesn't need to be perfect. Estimate the year as best you can. If it changes a lot, update your code.
Budgeting with two pays
Two jobs usually means two paydays on different cycles, which makes "how much can I spend this week?" harder to answer. The take-home pay calculator has a second-job option to show what each pay will be after tax. KeaBudget then lets you add more than one pay, choose the one your budget follows, and check in each payday.
Figures are for the 2026/27 tax year (1 April 2026 to 31 March 2027), from IRD's published rates. The over- and under-tax checks leave out tax credits. This is general information, not tax advice.