As an employee you must complete a Tax code declaration (IR330). This tells your employer the rate of PAYE to deduct including any student loan. As a contractor receiving schedular payments you must complete a Tax rate notification for contractors (IR330C). This informs the payer the amount of tax to deduct from your payments. Note: contractors don’t have student loan repayments deducted from their payments.
Different tax codes apply to different income sources. If your income source changes, for example you:
- start a new job
- get a second job
- pay off a student loan, or
- start receiving a Work and Income benefit or NZ Superannuation
you may need a new tax code.
It’s important that you use the right tax code for your situation or you’ll pay too little or too much tax. This could mean you end up with a tax bill at the end of the year.
Find your tax code
You need a separate tax code for each source of income which has tax deducted before it’s paid to you. You’ll have a primary tax code for your main source of income and secondary tax codes for any other sources.
source: https://www.ird.govt.nz/how-to/taxrates-codes/codes/earning-income-taxcode.html