Universal Social Charge in Ireland

See Budget 2015 USC Changes Here

The 2011 Budget  in Ireland introduced a new tax on income called the Universal Social Charge (USC) which began in January  2011.  Initially  – all individuals were  liable to pay the USC if their gross annual income was more than €4004  (€77 a week).

In Budget 2012 –  the threshold for paying USC was increased  – so that only people on incomes over €10036 a year (€193 a week)  paid the charge from January 2012

 

Details of Changes to USC Rates  2013

See here for details of USC Deductions for 2012

The rates for  USC in 2012 were as follows

Zero if total income is  under  €10036 a year

For people with income of  €10,036 or more the rates will be :

2% on  all income from 0 up to  €10,036

4% on earnings between  €10,037 and  €16,016

7% on any income over  €16,016

People aged  70 or more will have a  maximum rate of of 4% USC  (Even on Income over €16,016 ) .

Medical card holders also will have a top rate of 4% USC .  See Medical Cards and USC here.

Changes to USC Rates  2013

Some incomes are not liable for  USC  – such as welfare benefits , state pensions.

See here for the  Income types that are not subject to the Universal Social Charge

See Here for  Examples of 2011 USC Calculations

For PAYE workers – the Universal Social Charge will be deducted from wages. Where the USC has been applied for particular pay period(s) throughout the year but at year end you are ultimately not liable or are liable for a lower rate you will be due a refund of some or all of any Universal Social Charge paid.

Refunds : Where you have been in continuous employment with an employer throughout the year in question (i.e., from 1 January to 31 December), your employer should refund any overpayment of Universal Social Charge deducted at the end of the year. (Check that they do). Where you have not been in continuous employment with a single employer throughout the year-  Revenue will deal with any refund .

USC replaced the Health Levy and the Income Levy :

The Health Levy was charged  at 4% on all earnings  above €26000  up to €75,036 and 5% on earnings over €75,036.

The Income Levy was set at 2% on income up to €75,036, 4% on income from €75,037 to €174,980 and 6% on income above €174,980. (Exempt if Medical Card holder or earning less than €15,028)

119 Comments

  1. Eliza says:

    I am a bit confused, if someone for example earns 11,000 euro, do you not charge them USC on the first 10,000 and only charge them on the 1,000?

  2. jack quigley says:

    i have been working passed 3years in ireland and paying universal social charge as a none resident living in northern Ireland am i entitled to a rebate

  3. Cath says:

    Hi

    I have been working on a temporary contract from April 2011 to January 2012. I have been paying statutory tax and USC charges. Am I entitled to a refund as I am now unemployed for any of tax paid within current financial year?

    Thanks in advance

  4. Nico says:

    I only worked 8 months in 2011 (until end of August). What would the total USC be for 71,9k taxable income? Once I claim tax back will this automatically assessed for USC refund?
    thanks

  5. Brian Judd says:

    I receive €10,816.00 p.a. on a community employment scheme. Also I have a New Ireland Annuity of €175.03 per month. My Jan 2012 net payment from New Ireland was €91.02 (USC €12.25;PAYE €71.76)
    I have now requested Revenue to allocate €421.00 of my yearly tax credits to New Ireland. Should I be liable at all for the USC? Is my CE payment used in calculating my total income? Finally is net deposit interest after DIRT has been paid considered Income liable for the USC? Thank you.

    • Money Guide says:

      Brian – CE income is used to calculate total income – but is not actually charged USC. Tax credits do not affect USC.
      Interest that has been subject to DIRT is not subject to USC.

  6. Doreen says:

    Hi
    I have a small pension of just under €600 per month and as I’m in my 80’s, also have a state pension and medical card. I have a total of €11.75 universal charge deducted per month, is this correct?

    • Money Guide says:

      Doreen – it seems to be correct. Although the state pension is exempt from the USC – it is still used to calculate if your income is over th threshold. The 11.75 is 2% of the €600 pension.

  7. Margaret Butler says:

    Hi

    My husband and I are both over 70 and in receipt of the contributary Old Age Pension. In addition, we have a small occupational Pension of €212.12 per month. A deduction was made by the Pension Provider (Eagle Star) of €4.24 for the January Pension. Surely this is not correct? If I am right, how do I get it changed?

    • Money Guide says:

      Margaret – are you sure this was USCand not Income Tax?

    • Money Guide says:

      Maragaret – the 4.25 USC is 2% of the 212 occupational pension. The government say that state pensions are exempt from the USC – but it is still used to calculate your total income – and that brings you over the USC threshold. State Pension is not disregared for USC purposes – but no USC is charged on it. Hope that helps?

  8. mary says:

    hi i earned 6175 in 2011, some weeks i worked more hours than others but this was my total paid, my usc cert said i paid 158.25 this seems too much by my calculations – where can i apply for rebate?

  9. Marie says:

    I am self-employed, and permanently reside in Ireland. However, all of my income is sourced from the US. Is my gross income subject to the USC? Thank you.