Tax codes

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What tax code should you be on?

If you're earning income you'll need a tax code and a student loan (SL) repayment code if you have a student loan. Different tax codes apply to different work situations, so it's important you fill out an IR330 (external link) with the right tax code each time:

  • you start a new job, and
  • your income or student loan situation changes.

This will reduce the chance of you having an income tax and/or student loan bill to pay at the end of the year.

Your employer will give you an IR330 form to fill in, sign and give back to them. The full list of codes is on the form. If you need help with choosing the right tax code you can use our decision tree (external link) or call us on 0800 277 774.

What happens if you don't complete an IR330?

If you don't complete an IR330, your employer will take out tax, using the no notification rate, which is at a much higher tax rate.

What happens if you choose the wrong tax code?

If you're not using the correct tax code, it's likely that you'll have tax to pay at the end of the tax year.

While it's your responsibility to choose the correct tax code on the IR330, we want to reduce the number of salary and wage earners getting into debt as a result of using incorrect tax codes.

If you choose the wrong tax code we'll write to your employer asking them to change it to the right code.

If you disagree with this change, you can call us on 0800 227 774.

Example 1

Lisa has an after-school job in a cafe. She works three hours a day, five days a week. This is Lisa's only job, so she uses the "M" tax code.

Example 2

Matt works during the high school holidays in a supermarket for 30 hours a week. He doesn't have a student loan so he uses the "M" tax code. Matt then gets a second job during the holidays for 8 hours a week at a bakery. His total income is $4,400 for the year.

Matt uses our decision tree (external link) to check what tax code he should use for his bakery job. As Matt's total annual income is under $48,000, he uses S.

Example 3

Tim's finished university and works 40 hours a week at a restaurant. Tim has a student loan and as he earns over the pay period repayment threshold (external link) he uses the "M SL" tax code. This tells his boss how much tax to take out of Tim's pay, including an extra amount which goes towards repaying his student loan.

Example 4

Ben works as a pizza delivery driver during the weekend. He works 5 hours on Friday night, and 6 hours Saturday. Ben didn't enter a tax code on his IR330 when he started the job. As his employer still has to pay PAYE tax on Ben's behalf to Inland Revenue, Ben's charged the no notification rate of 45c (plus earners' levy of 1.7c) per $1 that he earns. This means Ben gets less take home pay than he would get if he had entered a tax code when he started the job.

Example 5

Sally works full-time as an apprentice florist and receives a salary of $39,000. She doesn’t receive any other income and knows she qualifies for the independent earner tax credit. She uses the "ME" tax code on the Tax code declaration (IR330) form and gives this to her employer.

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