💼 Secondary Income Tax Codes

When Secondary Codes Apply

If you have more than one job, your secondary job(s) must use secondary tax codes. These have no low-income threshold - tax starts from first dollar earned.

Secondary Tax Code Options:

Why Secondary Codes Withhold More

The low-income threshold can only be claimed once. Your main job (M or ME code) claims it. Secondary jobs assume you've already used the threshold, so tax every dollar.

The Math:

Choosing the Right Secondary Code

Decision Framework:

• Estimate combined annual income from all jobs
• Match to secondary code rate that approximates overall tax bracket
• Too high: Get refund at year-end but reduced take-home all year
• Too low: Higher take-home all year but owe at year-end
• Adjust if needed: Can change code anytime via IR330 form

🎓 Student Loan and Special Codes

Student Loan Tax Codes (SL Suffix)

If you have a student loan and earn above repayment threshold, add "SL" to your tax code for automatic student loan deductions.

Student Loan Codes:

Why SL Code Matters:

• Automatic deductions prevent year-end debt accumulation
• Employer withholds and pays IRD directly
• If you forget SL code, you'll owe full year's repayments at tax time
• Threshold applies - deductions only on income above threshold

Special Circumstance Codes

ND - No Declaration:

• When: Haven't provided tax code to employer
• Rate: Higher withholding rate applied (45%)
• Fix: Complete IR330 tax code declaration form
• Why high: Protects you from underpaying if actually high earner

CAE - Casual Agricultural Employee:

• Who: Seasonal agricultural workers
• Rate: Specific rate for this work type
• When: Short-term agricultural/horticultural work

EDW - Election Day Worker:

• Who: Electoral commission workers on election days
• Rate: Special rate for election day payments
• When: Specifically for election day work only

STC - Special Tax Code:

• When: IRD determines special rate needed for your circumstances
• How: IRD issues STC rate directly to employer
• Why: Unusual income patterns or specific situations requiring custom rate

✅ Checking and Changing Your Tax Code

How to Check Your Current Code

Where to Find It:

• Payslip: Tax code should be shown on every payslip
• Ask employer: Payroll department can confirm code on file
• myIR: Login to check what employers have on record

When to Update Your Tax Code

Life Events Requiring Code Change:

How to Change Your Tax Code

Process:

1. Determine correct code for your situation
2. Complete IR330 form (Tax code declaration)
3. Give to employer (payroll department)
4. Verify on next payslip that new code being used

Common Tax Code Mistakes

Mistake 1: Using M Code for Both Jobs

If you have two jobs both using M code, you're claiming the threshold twice. Underpaying tax substantially. Will owe large amount at year-end.

Mistake 2: Using Secondary Code for Only Job

If secondary code (S, SH, ST) used for your only job, you're not claiming the threshold you're entitled to. Overpaying all year, get refund but lost use of money.

Mistake 3: Wrong Secondary Code Rate

Using SB when should use SH results in underpaying. Using ST when should use S results in overpaying. Match code to actual combined income level.

Mistake 4: Forgetting SL Code

Have student loan but no SL on code means no automatic deductions. Owe full year's repayments at tax time instead of spreading across year.

Year-End Reconciliation

IRD reconciles your total income and total tax paid across all jobs at year-end. Even with wrong tax codes during year, year-end squares it up - but you may owe money or be due refund.

The Reconciliation Process:

Final insight: Tax codes are simple instructions but critical for correct PAYE withholding. Using correct code means right tax deducted throughout year - no nasty surprises at tax time. Check your payslip to verify code is correct for your situation. Update code when circumstances change. Five minutes to complete IR330 form prevents year-end stress and potential penalties from using wrong code.