Your secondary tax code and the tax on a second job.
Secondary tax code
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Tax on second job
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Take-home from second job
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Your breakdown
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Secondary tax is not a penalty, it is arithmetic
The most persistent myth in New Zealand payroll is that a second job gets punished by a higher tax rate. It does not. Secondary tax exists because your tax-free progression, the lower bands at 10.5 and 17.5 percent, is already used up by your main job. Your second employer has no way of knowing what your first job pays, so they cannot start you again at the bottom rate. Instead you give them a secondary tax code that tells them which band your total income reaches, and they tax the whole second income at that rate. The result is that across both jobs you pay roughly the right total tax. This tool finds the correct code from your main income and shows the tax on the second job.
Matching the code to your total income
The codes step up with income. SB applies when your total stays under $15,600 and taxes the second job at 10.5 percent. S covers $15,600 to $53,500 at 17.5 percent. SH covers $53,500 to $78,100 at 30 percent. ST covers $78,100 to $180,000 at 33 percent. SA applies above $180,000 at 39 percent. The bands line up exactly with the main income tax brackets, which is the whole point: the code picks up the marginal rate your second-job dollars would have faced if both incomes were added together on one payslip.
A $60,000 main job plus a $15,000 side job
Take someone earning $60,000 in their main job who picks up a $15,000 second job. The $60,000 lands in the $53,500 to $78,100 band, so the correct secondary code is SH and the rate is 30 percent. The full $15,000 second income is taxed at 30 percent, which is $4,500, leaving $10,500 before the ACC earner levy. The breakdown is below.
When the code over-taxes you, and the fix
The flat secondary rate can take too much when your total income straddles a band boundary. Imagine your main job is $50,000 and your second job is $10,000. On code S the second job is taxed at 17.5 percent, but part of your combined $60,000 actually belongs in the 30 percent band, so you would be slightly under-taxed and face a small bill. Run it the other way, with a main job just over a threshold, and a chunk of your second income that should have been taxed lower gets hit at the higher flat rate, so you over-pay through the year and wait for a refund. The modern fix is the tailored tax code: you apply to Inland Revenue, they look at your real combined income, and they issue a custom rate so your withholding lands close to correct in real time rather than being trued up months later.
Do not forget the levy and the year-end truth
Two practical points. First, the figures here are income tax only; the ACC earner levy of 1.67 percent is deducted on top of secondary-job wages just as it is on your main job, so your actual take-home is a little below the $10,500 shown. Second, secondary tax is never the final word. Inland Revenue runs an automatic year-end assessment that adds both jobs together and works out your true tax, then refunds an overpayment or bills a shortfall. So even if the code is slightly off, the system corrects it eventually. My advice is to choose the code that matches your genuine total income rather than guessing low to boost your weekly pay, because guessing low just converts a small weekly gain into a larger bill you have to find at year end.
Which job should carry the main tax code?
Put your primary M code on the job that pays the most, and the secondary code on the smaller one. This gives you the benefit of the lower bands on the larger income, where it matters most, and minimises the total tax withheld through the year. If you switched which job is bigger, update the codes so the higher earner keeps the main code.
Is the take-home figure the same as my tax refund position?
Not quite. The take-home here reflects the flat secondary rate applied to the second job, before the ACC levy and before any year-end adjustment. Whether you end up with a refund or a bill depends on how your combined income maps onto the actual brackets, and on credits like the Independent Earner Tax Credit if you qualify. Use the year-end assessment as the source of truth, and treat this calculator as the in-year planning view.