NZ Super and tax: tax codes, working, and why there is no income test

NZ Super is taxable income, and Work and Income takes the tax off before paying you. If NZ Super is your only or main income your tax code is M, and the after-tax rates are the familiar $555.15 a week for a single person living alone and $427.04 each for a couple. If you also have a job, one income uses M and the other a secondary code (SB, S, SH, ST or SA) chosen from your total yearly income, including NZ Super. Choosing the wrong one leads to a tax bill or a refund at year end. What you earn never cuts your NZ Super, because it has no income test. Rules checked 12 November 2026.

How NZ Super is taxed

Inland Revenue is direct about it: "Income-tested benefits, Student Allowance and New Zealand superannuation (NZ Super) are taxable income." Work and Income acts like an employer, deducting PAYE before each payment. Three things are different from wages:

• No ACC earners' levy. NZ Super is not liable for it, so nothing is deducted for ACC. Wages from a job are still levied at 1.75% in 2026/27.
• The law sets the after-tax rate. The net figures at M are fixed in the rates order each April, and the gross figures are worked back from them.
• No ME code. The ME code, which gives the independent earner tax credit, cannot be used by anyone receiving NZ Super (IR330 note 5).

Your NZ Super tax code goes to Work and Income on an IR330, not to your employer. Your employer gets a separate IR330 for the job.

Which tax code: M, S, SH, ST or SA

Only one income can use M. Use M on whichever source pays you the most over the year. Every other income takes a secondary code, picked from your total annual income from all sources:

NZ Super alone, before tax, is $33,663.24 a year for a single person living alone and $25,591.28 for each member of a couple. So even a modest job usually pushes the total into the S or SH band.

If the job pays more than NZ Super, swap them round: the job takes M and NZ Super takes the secondary code. These are the weekly amounts of NZ Super you would then receive:

A lower payment at a secondary code is not a cut in NZ Super. It is more tax taken at source, which matters only for how your tax squares up at the end of the year.

Worked example: Helen works 20 hours a week

Helen is 67, single, lives alone, and earns $500 a week ($26,000 a year) from a part-time job. Her NZ Super before tax is $33,663.24 a year, more than the job, so NZ Super keeps M. Her total income is $59,663, which falls in the $53,501 to $78,100 band, so the correct code for the job is SH.

At the end of the tax year, the tax actually due on her wages is $5,320.41 plus $455 of ACC levy. That is because the first $19,837 of her job sits in the 17.5% band (between her NZ Super and $53,500), and only the rest in the 30% band. Over the year:

• At SH, her employer withholds $8,255 (52 weeks of $158.75). That is $2,479.59 too much, which comes back as a refund after 31 March.
• At S, they withhold $5,005. That is $770.41 too little, and Inland Revenue would send her a bill.

Across the year her job really adds about $388.93 a week after tax and levy to her income. If you would rather get the right amount through the year than a refund, you can ask Inland Revenue for a tailored tax code, which sets a custom rate for the job. Our retirement calculator uses the year-end figure, not the PAYE withheld, when it adds part-time work to your retirement pay.

Why NZ Super has no income test

Work and Income says you "can work while you get NZ Super" and that it "doesn't depend on your income or your assets." New Zealand is unusual here. Many countries reduce the state pension as other income rises. NZ Super is universal: everyone who meets the age and residence rules gets the same rate for their living situation, and it is taxed like any other income. Higher earners pay more of it back through tax, but nobody loses entitlement by working or saving.

There are a few exceptions to know about:

• Overseas pensions can reduce NZ Super.
• Partner-included payments, closed to new applicants since November 2020, are income tested.
• Other help, such as the Accommodation Supplement, is income tested, so working can affect those payments even though NZ Super itself is untouched.

Means testing comes up at most elections. At the 2026 election, Labour and NZ First both said they would not means test NZ Super. Any change would be a proposal, NOT LAW, until passed. See NZ Super and the 2026 election.

Tax on your savings in retirement: the PIR

KiwiSaver and most managed funds are portfolio investment entities (PIEs). Their returns are taxed inside the fund at your prescribed investor rate (PIR): 10.5%, 17.5% or 28%. NZ Super counts as taxable income in the PIR test, so it affects your rate.

• A single person on NZ Super alone has taxable income of $33,663.24, above $15,600, so 10.5% is not available. With $10,000 of PIE income they would use 17.5%, because taxable income is under $53,500 and taxable plus PIE income is under $78,100.
• Add $25,000 of wages and taxable income becomes $58,663, over $53,500, so the PIR is 28%.

The PIR test looks at the last two income years, and you can use the lower result. Many people stay on 28% out of habit after they stop work; telling your provider your new PIR can lift your after-tax return. Our guide on tax on retirement savings goes further.

A quick tax checklist at 65

1. When you apply for NZ Super, give Work and Income an IR330 with M if NZ Super will be your main income.
2. If you keep working, give your employer an IR330 with the right secondary code, from your total income including NZ Super. Do not use M or ME on both.
3. If you have a student loan, use the SL version of the code; there is no age exemption in the material we reviewed.
4. Review your PIR with your KiwiSaver and fund providers.
5. After 31 March each year, check your income tax assessment in myIR.

The working after 65 guide shows what part-time work does to your retirement pay. This is general information, not financial advice. For complex income, a tax agent can set a tailored code.

Questions

What tax code should I use for NZ Super?

M, if NZ Super is your only or main income. If another job pays you more over the year, that job uses M and NZ Super takes a secondary code chosen from your total income.

Is ACC levy taken off NZ Super?

No. NZ Super is not liable for the ACC earners' levy. If you work, the levy is taken off your wages at 1.75% in 2026/27.

Will working reduce my NZ Super?

No. NZ Super has no income or asset test for you. Working changes the tax you pay, and can affect income-tested help such as the Accommodation Supplement, but not your NZ Super.

Why did I get a tax refund after working part time?

A secondary code taxes every dollar of the job at one rate. If part of your job income really falls in a lower band, too much is withheld and Inland Revenue refunds the difference after 31 March.

Can I use the ME tax code on NZ Super?

No. IR330 says anyone receiving NZ Super must use M, or M SL with a student loan, and cannot use ME or ME SL.