More New Zealanders working more than one job, data shows

Thursday, 13 April 2023

Inflation is probably pushing people to look for ways to earn more, Tom Hartmann says.

Inflation pressures are probably prompting a growing number of people to take on a second job or start a side hustle, commentators say.

Inland Revenue has released data under the Official Information Act showing the number of New Zealanders working more than one job has increased by more than 40,000 in six years.

In the 2016/2017 tax year, there were 233,000 people receiving PAYE income from more than one employer for more than one month, or 9.2% of all people with job income.

That rose to 279,000 in the 2021/2022 year, or 10.4% of all people with job income.

A total of 561,000 people used a secondary tax code at some point in the 2021/2022 year compared to 511,500 in 2017/2018.

Debra Middleton says taking a second job is the only option when faced with rising bills

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Marcia Martin works multiple jobs just to stay afloat amid rising interest rates and cost of living increases.

That could include people who were receiving a benefit, superannuation or student allowance as well as income from another source such as a job at the same time.

The data does not include people who might be working as self-employed contractors on the side of other employment.

Last month, two women told Stuff they were taking on a second job to help pay the bills. Debra Middleton plans executive meetings at a top corporate, by night she works at a gas station. Marcia Martin is a teacher aide at a special needs school, but in the evenings she’s a respite carer and cleaner.

“I had no choice if I wanted to keep my home. My mortgage has shot up with rising interest. Where am I supposed to get that extra money? … So it got to a point when it was the only logical step,” said Middleton.

Tom Hartmann, personal finance lead at Sorted, said there was a noticeable trend.

He said Sorted’s surveys put the number of people setting up a side hustle or second income at 12% from 8% a year earlier.

“People are taking initiative to solve the cost-of-living conundrum. Because it’s likely linked to inflation, we do think it will continue as it remains a potential solution for people to consider as they aim to increase their income.”

He said, because a second job was not taxed at a higher rate, people could work as many jobs as they wanted without incurring higher rates of tax.

People using a secondary tax code have their income taxed at a flat rate of 30%. But if that proves to be too high at the end of the tax year, based on a person’s normal marginal tax rate, they will get a refund. “You’ll need to use the correct tax code for your second job to avoid getting the wrong tax applied.”

Shula Newland, a financial coach, said taking on more work was a “natural response” for many people.

”People who are capable of working longer hours just work harder.

”In different cultures, too. In the Indian culture, it’s quite normal to work two jobs.”

She said some people were worried about the prospect of paying more tax, and others were concerned about whether they would lose too much in Working for Families or other government assistance due to having higher income.

For some single parents, it did not make financial sense to take on more work, she said.

Nadine Higgins, a financial coach at Enable Me, said it was common for the business’s coaches to deal with clients who had secondary income sources, although there had not been a noticeable increase.

“More clients are becoming a lot more conscious of how they spend, for sure.”