Key Post A summary of the USC for 2013 and 2014

Brendan Burgess

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This summary sets out the rules which affect around 95% of people.
The Universal Social Charge FAQs - Revenue Commissioners covers very specific issues.

Comments and corrections are welcome



Rates
First €10,036|2%
Next €5,980|4%
Balance|7%
Example for someone earning €40,000 gross income

€10,036 |2%|€200.72
€5,980|4%|€239.20
€23,984|7%|€1,678.88
Total||€2118.80
Married people are treated as two single people for the USC
The thresholds apply to each spouse individually and cannot be combined where one spouse is below the thresholds and the other is above the thresholds.

A couple does not have twice the €10,036 band.


Exemption limit for low income: €10,036

If you earn €9,000 a year, you pay no USC.

If you earn €10,500, you pay USC on the full income.

3% surcharge on non-PAYE income over €100,000
There is a surcharge of 3% on individuals who have non-PAYE income that exceeds €100,000 in a year, regardless of age.

What income is it not charged on?

  • Social Welfare payments
  • Payments in lieu of Social Welfare e.g. CES and BTEA (Full list in Appendix A of Revenue FAQ)
  • Deposit interest subject to DIRT
  • Interest on Savings Certs
  • Rent which qualifies for Rent a Room Relief
  • Pension lump sums up to €575,000
The full list is in Appendix B of the Revenue FAQ



Not only are these exempt, they are not used in calculating the thresholds either. For example, if you have Social Welfare payments of €10,000 and salary of €8,000. The €10,000 is completely ignored. As the €8,000 is below the threshold, no USC is payable.


USC is charged on almost all other income


  • Salary
  • Benefit in kind (but USC is not charged on the Travel Pass or bicycle scheme)
  • Rental profits
  • Self-employed income
  • Pension income
  • Dividends
Some income which is exempt from tax is liable for the USC


  • Woodlands
  • Patent income
  • Artists' exemption


USC is charged on income before pension contributions

While pension contributions can be deducted when calculating the taxable pay, they cannot be deducted when calculating the pay liable to the USC



Older people who earn less than €60,000 pay a maximum rate of 4%
Individuals aged 70 years or over whose aggregate income for the year is €60,000 or less, will only pay Universal Social Charge at a maximum rate of 4%. ‘Aggregate’ income for USC purposes does not include payments from the Dept of Social Protection.

Medical card holders who earn less than €60,000 pay a maximum rate of 4%
Individuals in possession of a full medical card, including a Health Amendment Act card, whose aggregate income for the year is €60,000 or less, will only pay Universal Social Charge at a maximum rate of 4%. ‘Aggregate’ income for USC purposes does not include payments from the Dept of Social Protection.
 
Does anyone know if USC applies to gains which have been subject to Exit Tax for example on gains under ETFs or unit-linked funds?

Also: do the various levies apply as well?
 
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