Employee Tax Codes (NZ)

In New Zealand, the tax rates and thresholds used to deduct PAYE withholding tax for an employee are determined by the employee's tax code.

Available Tax Codes

The following tax codes are available on the Taxation tab of the Pay Details (MP.PP.23.10) form:
  • M - Main
  • M SL - Main with Student Loan
  • ME - Main with Independent Earner Tax Code (IETC)
  • ME SL - Main with IETC and Student Loan
  • S - Secondary: This tax code applies to secondary income between $14,000 and $48,000 per annum.
  • S SL - Secondary with Student Loan
  • SB - Secondary - Bottom: This tax code applies to secondary income less than $14,000 per annum.
  • SB SL - Secondary - Bottom with Student Loan
  • SH - Secondary - High: This tax code applies to secondary income between $48,001 and $70,000 per annum.
  • SH SL - Secondary - High with Student Loan
  • ST - Secondary - Top: This tax code applies to secondary income more than $70,001 per annum.
  • ST SL - Secondary - Top with Student Loan
  • NSW - Recognised Seasonal Worker
  • CAE - Casual Agricultural Worker
  • EDW - Election Day Worker
  • ND - No Notification: This is the default rate if no IRD number is supplied.
  • WT - Withholding: This code is used for tax on schedular payments (see below). When this code is chosen, the tax rate must be entered manually on the Pay Details form.
  • STC - Special Tax Code: This code is used when an employee has been given a special tax rate by the IRD. Employees may apply for a special tax code by completing a Special tax code application (IR23BS) form. When this code is chosen, the tax rate must be entered manually on the Pay Details form.
  • STC SL - Special Tax Code with Student Loan

WT Tax Code and Schedular Payments

Schedular payments are made to contractors who perform activities outlined in Schedule 4 of the Income Tax Act 2007. These payments are subject to tax at a flat rate even if the contractor is registered for GST. The IRD specifies the responsibilities for contractors and employers in these cases.

The contractor is responsible for:
  • Managing their own tax responsibilities (usually IR3)
  • Advising the employer of the tax rate to use (use IR330)
    • The minimum tax rate is 10%
    • The standard rate is 20%
    • The IRD may specify a rate between 0% and 100% (usually on either a STC Special Tax Certificate or by granting an exemption on an IR331)
  • Student loan repayments
  • Payment of ACC Earners' Levy
  • Payment of KiwiSaver contribution
The employer is responsible for:
  • Deducting tax at the rate advised, or else at the standard or non-notification rate. (Refer to the IRD's website for clarification on which rates to use.)
  • Deducting child support or other IRD/MoJ-specified deductions
  • Filing details on IR345 and IR348
    • For employees who have used both a PAYE tax code and schedular payment tax code (WT) during the month, show the respective details for each tax code on separate lines when completing the IR348
    • MYOB Acumatica — Payroll correctly completes the IS345 and IR348 when the WT tax code is used.
The employer is not responsible for the following items, and should ensure that they are not included in the employee's pays:
  • Student loan (there is no "WT SL" tax code)
  • KiwiSaver employee or employer contribution or ESCT
  • ACC Earners' Levy
MYOB Acumatica — Payroll's Dynamic Calculation Engine (DCE) overrides both KiwiSaver and the ACC Earners' Levy if they are configured in a pay item that is used for an employee with the WT tax code.
Note:
If an employee is GST registered, PAYE should be calculated on GST-exclusive income; MYOB Acumatica — Payroll does not explicitly support this. We recommend that you pay the GST as a separate non-taxable transaction.

See "Tax on schedular payments (formerly withholding tax), tax codes, tax rates and workers" the IRD's website for more information.