What is the difference between M and ME tax codes in NZ?

M is the standard primary tax code. ME is M plus the Independent Earner Tax Credit (IETC), which gives you up to $520 per year extra in your take-home pay. ME applies if your annual income is between $24,000 and $70,000 AND you don't receive Working for Families, a main benefit, NZ Super, or an overseas equivalent. The IETC is fully available up to $66,000 income and abates by 13c per dollar above that, phasing out at $70,000.

What happens if I don't provide a tax code?

If you don't provide an IR330 form (or your IRD number) to your employer, they must deduct PAYE at the no-notification rate of 45% on every dollar of your wages. This is the highest possible PAYE rate and will leave you significantly under-paid each pay period. Always complete an IR330 with your correct code as soon as you start a new job.

Which secondary tax code should I use for my second job?

Your secondary tax code depends on your TOTAL expected annual income from all jobs. SB applies if total income is under $15,600. S applies if total is $15,601 to $53,500. SH applies if total is $53,501 to $78,100. ST applies if total is $78,101 to $180,000. SA applies if total is over $180,000. The threshold is your total income, not just the secondary job's income.

Do I need an SL suffix on my tax code?

Yes, if you have an active New Zealand student loan and earn above the repayment threshold ($24,128 for the 2026/27 tax year). Add SL to your primary code (M SL or ME SL) so 12% of every dollar above the threshold is automatically deducted as student loan repayment. For secondary jobs with an SL suffix (S SL, SH SL, etc.), 12% is deducted from EVERY dollar of secondary income because the threshold is already used by your main job.

Can I use the ME code if I receive Working for Families?

No. The Independent Earner Tax Credit (IETC) and Working for Families Tax Credits (WFF) cannot be received at the same time. If you currently receive WFF, use the M code (or M SL with student loan). If you stop receiving WFF, you can switch to ME if you also meet the income criteria. The same exclusion applies to recipients of main benefits and NZ Super.

NZ Tax Code Picker (IR330 Helper)

The wrong tax code is one of the most common reasons NZ workers end up with a tax bill (or a missed refund) at year end. This tool walks through the IR330 form questions and tells you exactly which code to use, with explanations for the key choices. Covers all primary codes (M, ME, with optional SL suffix) and all secondary codes (SB, S, SH, ST, SA), tested against the 2026/27 thresholds. Critical: leaving a code blank triggers the 45% no-notification rate.

Updated April 2026 Implements IR330 selection logic per IRD 2026/27 thresholds.

Step 1: Income source

Is this your main (highest paying) source of income, or a secondary job?

If you have multiple jobs, the highest-paying one uses a primary code (M / ME). All others use secondary codes (S / SH / ST / SA / SB).

Step 2: Income

What is your expected annual income from this job?

Step 3: Student loan

Do you have an active NZ student loan?

Add SL suffix if yes. Repayment is 12% of every dollar over $24,128 (annual) on your primary job, or 12% of all gross on secondary jobs.

Step 4: Other income / benefits (primary code only)

Do you currently receive Working for Families Tax Credits, a main benefit, NZ Super, or an overseas equivalent pension?

If you receive any of these, you cannot use the ME code (which includes the IETC). The IETC and these benefits cannot be received at the same time.

Primary tax codes explained

M — Main job, no IETC. Use if your annual income is below $24,000 or above $70,000, or if you receive Working for Families, a main benefit, or NZ Super.
ME — Main job + Independent Earner Tax Credit ($520/year). Use if your annual income is between $24,001 and $70,000 AND you don't receive WfF, main benefit, or NZ Super.
M SL — Main job with student loan deductions (12% over $24,128 annual threshold).
ME SL — Main job + IETC + student loan.

Secondary tax codes explained

SB — 10.5% — Use if your TOTAL income from all sources is under $15,600.
S — 17.5% — Use if total income is $15,601 to $53,500.
SH — 30% — Use if total income is $53,501 to $78,100.
ST — 33% — Use if total income is $78,101 to $180,000.
SA — 39% — Use if total income is over $180,000.
Add SL to any of the above for a student loan secondary deduction (e.g. S SL, SH SL).

Other tax codes

CAE — Casual agricultural employees (17.5% flat).
EDW — Election day workers (17.5% flat).
NSW — Non-resident seasonal workers (10.5% flat for RSE workers).
WT — Withholding tax for schedular payments (contractor income).
STC — Special tax code (only with IRD certificate).

The 45% no-notification trap

If you don't give your employer a completed IR330 form (with your IRD number and tax code), they must deduct PAYE at the no-notification rate of 45% on every dollar. This is higher than even the 39% top marginal rate. Always submit an IR330 on day one of any new job.

Sources

This tool provides general guidance only. If your situation is complex (multiple jobs, partial-year income, schedular payments, special STC), confirm with IRD or a tax adviser before submitting your IR330.

Related calculators

NZ PAYE and Salary Calculator — calculate full take-home pay
Secondary Income Tax Calculator — for second jobs
Take Home Pay Calculator — net pay after all deductions
Student Loan Repayment Calculator — if you have an SL code
Working for Families Calculator — WfF entitlement check

Calculate.co.nz is partnered with Interest.co.nz for New Zealand's highest quality calculators and financial analysis.

All calculators and tools are provided for educational and indicative purposes only and do not constitute financial advice.

Calculate.co.nz is proudly part of the Realtor.co.nz group, New Zealand's leading property transaction literacy platform, helping Kiwis understand the home buying and selling process from start to finish. Whether you're a first home buyer navigating your first property purchase, an investor evaluating your next acquisition, or a homeowner planning to sell, Realtor.co.nz provides clear, independent, and trustworthy guidance on every step of the New Zealand property transaction journey.

Calculate.co.nz is also partnered with Health Based Building and Premium Homes to promote informed choices that lead to better long-term outcomes for Kiwi households.

All content on this website, including calculators, tools, source code, and design, is protected under the Copyright Act 1994 (New Zealand). No part of this site may be reproduced, copied, distributed, stored, or used in any form without prior written permission from the owner.