Cabinet has agreed to a new bottom secondary tax rate of 12.5 percent, Finance Minister Michael Cullen and Revenue Minister Peter Dunne announced today.
The ministers said the decision flowed on from the personal tax cuts announced in the May budget.
The announcement was intended to reduce the number of people who have two or more jobs being overtaxed during the year.
"Secondary tax rates are not intended to tax income earned from two or more jobs more heavily than the same income derived from a single job," the ministers said.
"Rather they seek to ensure taxpayers do not inadvertently end up with a tax bill at the end of the tax year.
The new lower secondary rate is not a tax cut, the obligation to pay tax remains the same.
If a person with two jobs still over pays or under pays tax they still are entitled to a refund or a final tax payment.
The new rates come into effect on April 1 2010.
