Q: I have a client who is going to work in Rarotonga for 6 months, but will continue to receive wages from there business in New Zealand while they are over there(to top up the low wages in Rarotonga). Would it be correct to change the tax code for the wages received via their NZ business to S if it is lower than what they will receive in Rarotonga, or keep it as M if what they will receive from job in Rarotonga will be less. I.e. whichever of the 2 wages that is higher is M and lower is S regardless of the international means of the other income?

A: It would still be M as that is about earnings here.  Will the employee get paid in Rarotonga as well?

Look at this IRD link: https://www.ird.govt.nz/income-tax/income-tax-for-individuals/types-of-individual-income/overseas-income