Pay, PAYE and student loans

What is secondary tax?

Last verified · Methodology

What it means

If you have more than one job, only one can be on a main code. Every other job uses a secondary tax code, and PAYE on that job is taken at a single flat rate from the first dollar, with no lower bands. The rate you pick should match the band your total income from all jobs falls into, so that the extra income is taxed at your top rate.

The secondary codes are SB (10.5% band), S (17.5%), SH (30%), ST (33%) and SA (39%). The ACC earners' levy is added on top, so the deduction rates are 12.25%, 19.25%, 31.75%, 34.75% and 40.75%. If you have a student loan, use the SL version and 12% of all secondary pay goes to the loan, with no threshold.

How it is worked out

Secondary PAYE = pay (cents dropped) x (band rate + ACC earners' levy rate)

Example

A second job paying $600 a week on code S has $115.50 of PAYE deducted, which is 19.25% of the pay.

Run the numbers

Open the Income tax calculator

Related terms

Tax code MTax code M is the main tax code for your only or highest-paying job. ME adds the independent earner tax credit, and SL adds student loan deductions.PAYE (Pay As You Earn)PAYE is the income tax and ACC earners' levy your employer takes out of each pay and sends to Inland Revenue, based on the tax code you give them.Student loan repayment thresholdThe student loan repayment threshold is $24,128 a year. Above it, 12 cents of every dollar of salary or wages goes to your loan.
Secondary tax: common questions

Secondary tax is PAYE on a second job, taken at one flat rate from the first dollar. The code (SB, S, SH, ST or SA) depends on your total income.

Secondary codes skip the lower bands because your main job has already used them. If the flat rate is higher than you need, you can ask IRD for a tailored tax code.

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