Secondary Income Tax Query

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Forums › Finance and wealth management › Secondary Income Tax Query

Paul1977

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#217990 21-Jul-2017 14:06

My partner and I were having a debate.

She says that if you work two jobs you are taxed more heavily than if you work a single job for the same amount.

E.g. someone working two jobs earning $25000 each will pay more tax than someone working a single job at $50000.

I say that while the flat tax rate on secondary income may result in you paying more tax throughout the year, that your tax obligation is based on total income (regardless of the number of jobs) so you be entitled to a tax refund of the difference.

The IRD website doesn't seem to be entirely clear on this (at least to me), so which one of us is correct?

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TheMantis

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#1826520 21-Jul-2017 14:11

You are right and she is wrong. Secondary income tax is exactly the same as primary income tax. However, you will possibly incur more PAYE now and have to claim it back at the end of the tax year once an actual yearly tax liability is determined.

richms

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#1826521 21-Jul-2017 14:13

You are. Also you get really screwed with secondary income when you have a student loan.

PAYE rates are set to get enough that most people do not have a tax bill at the end of the year, so its too much in most cases. Only accurate if you never get a pay rise, never cash out holiday pay, dont take any unpaid days etc. Tax return time is when you work out the total tax you should pay on your total income for the year, and either pay more or get the refund of what PAYE has overtaken from you. Most people get a refund because they have had a pay increase, or taken time off, or whatever so there were a variety of payment amounts thruout the year. If you have been taxed on secondary pay then you are straight into the higher tax rates so will get a refund.

Richard rich.ms