The 2011 Budget in Ireland introduced a new tax on income called the Universal Social Charge (USC) which began in January 2011. This was the last Budget of the Fianna Fail/ Green coalition.
Initially – all individuals were liable to pay the USC if their gross annual income was more than €4004 (€77 a week).
In Budget 2012 – (Fine Gael / Labour) 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
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 had a top rate of 4% USC . See Medical Cards and USC here.
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
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)