Determining your tax code can be intricate, especially with a student loan and part-time employment. In New Zealand, if your part-time job is your primary income, use 'SL' in your tax code (M SL or ME SL). This code ensures correct loan repayments. For secondary income, choose a code based on your estimated annual total income from all sources. However, consult the Inland Revenue Department or a tax professional for personalized advice and accuracy.
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“I’m about to start part-time employment (hence asking about correct code). I’ve confuzzled myself on type of tax code I should put down. Full-time student (therefore have a student loan). Receive the accommodation supplement. My part time job will earn more than the accommodation supplement… Therefore, do I need to ask for a tailored tax code or just ring ird?”
(Original question on Reddit)
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Determining your correct tax code can be a bit complex, but I can offer some general guidance. Remember that it’s always a good idea to contact the Inland Revenue Department (IRD) directly or consult a tax professional for personalised advice, as there could be new changes or updates. Here are some considerations for your situation:
Based on the information you’ve provided, you’re a full-time student with a student loan and about to start part-time employment. You also receive the accommodation supplement.
In New Zealand, when you have a student loan and earn a salary or wages, the repayments from your income depend on how much you earn and whether it is your main or secondary income. You must add ‘ SL ‘ to your tax code when you get a salary or wage and have a student loan. This tells your employer you have a student loan, and they need to deduct repayments from your pay to put towards your loan.
If your part-time job will be your main source of income, you would use a tax code with ‘SL’ for your main job (M SL or ME SL). You repay 12% of every dollar you earn over the pay period repayment threshold each year towards your loan.
If you have more than one source of income, you use a secondary tax code for your other income. The secondary tax code depends on the estimated annual total income from all sources.
So your tax code may be M SL or ME SL. However, it’s always a good idea to contact Inland Revenue directly or seek advice from a tax professional to ensure you’re using the correct tax code for your situation. They can provide the most accurate information based on your personal circumstances.
Hope this helps.
Regards, Clive Fernandes (Financial Adviser)
Director – National Capital
Disclosure: I am the director of National Capital, a KiwiSaver advice firm. The information in this post is only general in nature and is not personalised financial advice. Please contact us if you want financial advice.
