Key Post A summary of USC for 2015

Brendan Burgess

Brendan Burgess

Founder
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This is based on Budget 2015



Rate for employees
First €12,012|1.5%
Next €5,564|3.5%
Next €52,468|7%
Balance|8%
Rate for self-employed
First €12,012|1.5%
Next €5,564|3.5%
Next €52,468|7%
Next €29,956|8%
Balance|11%

Example for an employee earning €80,000 gross income

€12,012 |1.5%|€180.18
€5,564|3.5%|€194.74
€52,468|7%|€3,672.76
€9,956|8%|€ 796.48
Total||€4,844.16



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 €12,012 band.


Exemption limit for low income: €12,012

If you earn €12,000 a year, you pay no USC.

If you earn €12,030, you pay USC on the full income or €180.81



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 3.5%
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 3.5%. ‘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 3.5%
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 3.5%. ‘Aggregate’ income for USC purposes does not include payments from the Dept of Social Protection.
 
USC applies to employee pension contribution

Does this mean that the effective tax on pension contributions for employees earning over 70k has increased by 1%? This is because the USC increase to 8% is not offset in this case by the decrease in higher rate of income tax.
 
USC charged twice and PRSI too if you retire early

Yes, it does.

Indeed employee contributions to pensions are becoming less and less attractive. USC relief is not given on contributions and USC then has to be paid on pension income.

And if you can afford to retire early your pension income will be charged with USC AND PRSI on ARF withdrawals.

Employer contributions don't attract USC or PRSI.

Or I'm I wrong??
 
deadlyduck, does your calculator not work on Mac?

BTW, thank you, it's been very useful in previous years.
 
I developed all of the spreadsheet calculators [link] using a PC so I suspect they won't work on the Mac but have no means of testing them.

You could try Karl Grabe's web application which is cross browser compatible instead.

And thanks- glad you found them useful!
 
The list of items exempt from USC includes pension lump sums up to €575,000. Has this limit not reduced to €500,000 following the reduction in the limit on tex relieved funds from €2.3 million to €2 million?
 
There doesn't appear to be any change in that threshold per paragraph 2.26 of this PDF file (Frequently Asked Questions about the USC).
That PDF document was prepared in October 2014 and includes information about the 2015 rates so it seems that the €575000 threshold remains as before.
 
My take home pay didn't change at all in 2015. I earn €58k and am a public servant. I would have thought that I should have had a couple of euro extra per paycheque with the changes to USC and the higher tax rate. Am I wrong? Nothing else changed that would have counterbalanced this, iykwim.
 
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