New Zealand tax codes: which one to use
Your tax code depends on your situation, and Inland Revenue sets out the code to use for a student loan, ACC payments, schedular payments, casual agricultural work, recognised seasonal work, election day work and an MSD benefit.
On this page
| Figure | Value |
|---|---|
| Tax code | Your tax code tells your employer or payer how much tax to deduct from your pay, benefit or pension.Inland Revenue, About tax codes |
| No IR330 | If you do not give your employer an IR330, they’ll deduct tax from your pay at the non-declaration rate of 45%.Inland Revenue, About tax codes |
| MSD benefit | The income portion of an income tested benefit from MSD is always coded as M.Inland Revenue, What tax code should I use? |
| Schedular payments | Use the WT tax code for income from schedular payments.Inland Revenue, What tax code should I use? |
| Casual agricultural work | Use the CAE tax code if you are only doing casual agricultural work.Inland Revenue, What tax code should I use? |
| Recognised seasonal work | Use the NSW tax code if you’re a recognised seasonal worker or hold a work visa as foreign crew of a vessel fishing New Zealand waters.Inland Revenue, What tax code should I use? |
What a tax code does
You need to give your employer or payer your tax code so they know how much tax to deduct from your pay, benefit, pension or other taxable payment such as Student Allowance, an ACC compensation payment or paid parental leave. Your tax code tells your employer or payer how much tax to deduct from your pay, benefit or pension. There are several tax codes and it’s important to choose the one that’s right for you so you avoid a bill at the end of the tax year 31 March. Inland Revenue, About tax codes (opens in a new tab).
You need one tax code for your main or highest source of income. The code you use depends on the type and amount of your main income. Inland Revenue, About tax codes (opens in a new tab).
Inland Revenue’s tax code declaration - IR330 has a flowchart on pages 2 and 3 to help you work out the right tax code to use. You complete the IR330 and give it to your employer or payer. Now they can deduct the right amount of tax from your salary or wage. Inland Revenue, About tax codes (opens in a new tab).
If you do not give your employer an IR330, they’ll deduct tax from your pay at the non-declaration rate of 45%. If your tax code changes, you’ll need to give your employer or payer a new IR330. Inland Revenue, About tax codes (opens in a new tab).
Secondary tax codes
If you’re getting taxable income from more than 1 source at the same time, you may need to use a secondary tax code. This is because your extra earnings may have pushed you into a higher tax bracket. These income sources could include payments such as a pension, ACC, or a Work and Income Benefit. Each ‘layer’ of your income is taxed at a different rate. The higher layers are taxed at a higher rate than the lower layers. Inland Revenue, About tax codes (opens in a new tab).
Tax codes for particular situations
You only have 1 main income, which is your highest income source. All other income is secondary income. Any tax code you select is based on the type and level of your expected annual income. Also, you may need to choose a new tax code if things change during the year. For example: you take out a student loan or pay it off; you have a change in expected annual income; you change jobs or start a second job. Inland Revenue, What tax code should I use? (opens in a new tab).
If you’re getting PPL you choose a tax code just as you would with any other source of income. If you have a student loan, you choose a tax code that tells your employer to deduct your repayments. Once you’ve paid off your loan, you need to choose a new tax code and tell your employer what it is. If you’re getting ACC, you choose a tax code just like with any other source of income. Depending on how much you’re getting, ACC could be your main or secondary source of income. Your tax code with your employer may change depending on how much ACC pays you. Inland Revenue, What tax code should I use? (opens in a new tab).
Are you receiving a main benefit from MSD? The income portion of an income tested benefit from MSD is always coded as M. This means any other income must have a secondary tax code. You do not need a tax code for dividends or interest. Your payer will deduct resident withholding tax (RWT) for you. If you receive NZ Super, you can change your tax code through the Ministry of Social Development’s website. Inland Revenue, What tax code should I use? (opens in a new tab).
Use the WT tax code for income from schedular payments. Use the CAE tax code if you are only doing casual agricultural work. Casual agricultural workers do casual seasonal work on a day-to-day basis for up to 3 months. They earn no other income in this time. This group includes shearers and shearing shed-hands. Use the NSW tax code if you’re a recognised seasonal worker or hold a work visa as foreign crew of a vessel fishing New Zealand waters. Inland Revenue, What tax code should I use? (opens in a new tab).
Use the EDW tax code for income from temporary work during a general election in New Zealand. The EDW tax code covers the 2-week period of advanced voting and election day. If you are working on the election outside this period, use the tax code that best fits your circumstances as set out in the Tax code declaration - IR330. Inland Revenue, What tax code should I use? (opens in a new tab).
When Inland Revenue changes your tax code
If Inland Revenue sees that you’re using an unsuitable tax code, Inland Revenue may suggest you change it or apply to Inland Revenue for a tailored tax code. If you’re using the wrong tax code, such as using the M tax code on 2 sources of income at the same time, Inland Revenue will ask your employer or payer to change it. Inland Revenue will notify you when Inland Revenue does this. Inland Revenue does this to help you avoid getting a bill at the end of the tax year. Talk to Inland Revenue if you disagree with its decision to change your tax code. Inland Revenue, About tax codes (opens in a new tab).
Tailored tax options help you pay the right amount of tax if your circumstances mean you often have a large tax bill or refund. Inland Revenue, About tax codes (opens in a new tab).
Scope
This guide explains what New Zealand tax codes are and the situations the two published Inland Revenue pages cover. It does not restate the secondary tax rates or the PAYE tables, which stay in the income tax rates guide, and it does not cover student loan repayment rates; see the student loan repayments guide. No tax code finder or worked example is provided here.