USC underpaid by employer

dubdub123

Registered User
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596
Hi
Im finally getting aroumd to my 2023 tax returns. When i looked at my statement on line before doing anything, it said ive an underpayment of USC by over a thousand euro
Over years 2022 and 2023 i expect to get tax back of around this same amount as had a lot of medical costs..

How should I approach this underpayment? My employer is a large multinational and my only income source so I would have expected that it would be handled correctly via payroll..
Pretty annoyed now about this as Im pretty careful financially so as to avoid debt.

Will i need to pay this upfront now pr out of any potential tax returms? Had hoped to use any tax return to pay towards a loan..
 
Best option is to see if you get it discharged via adjustment of credits; the max they'll do is 4 years & you'll need to make a good case to be considered for that.

Good case might include say medical needs / disability / family etc

Its worth a shot in any event.
 
Best option is to see if you get it discharged via adjustment of credits; the max they'll do is 4 years & you'll need to make a good case to be considered for that.

Good case might include say medical needs / disability / family etc

Its worth a shot in any event.
Ok great thank you. So shluld i contact revenue directly to sort that? Also is it better to hold off completing tax returns for 2023 til i get it sorted?
Like any payroll system should be calculating thos correctly. Its so straightforward i never even thought to sanity check it in December.
Thanks!
 
Its closer to 1500 euro actually thats underpaid so even with tax refund i will most likely owe something. Cant believe that payroll were able to mess this up so much. Looks like they took approx 2% each month for most of the year..
 
Its closer to 1500 euro actually thats underpaid so even with tax refund i will most likely owe something. Cant believe that payroll were able to mess this up so much. Looks like they took approx 2% each month for most of the year..
It's highly unlikely that your employer's payroll department are to blame for this, unless they were literally overriding Revenue data and fiddling the figures.

Most likely, Revenue were using an incorrect basis for applying your USC bands last year and obviously neither you nor they noticed anything amiss during the year.

It's very unfortunate for you that this has happened. You should ask to repay this over as long a period that they can offer.
 
Its closer to 1500 euro actually thats underpaid so even with tax refund i will most likely owe something. Cant believe that payroll were able to mess this up so much. Looks like they took approx 2% each month for most of the year..
A very common misconception, Payroll use what ever “live data” is provided to them by Revenue, while unfortunate, it is ultimately the employees responsibility, not the employer, to check the data being used is correct, and in any event, any correction, can only be done by the employee, due to GDPR etc, and it is not the Employers place, to highlight a tax issue, as they are legally obliged to use what Revenue provides to them, not to do so, is illegal.

Employers have no access to change an Employees tax credits, standard rate bands, or USC bands. best practice, is to double check your revenue details, when they are issued around December each year, in advance of the incoming new tax year.
 
A very common misconception, Payroll use what ever “live data” is provided to them by Revenue, while unfortunate, it is ultimately the employees responsibility, not the employer, to check the data being used is correct, and in any event, any correction, can only be done by the employee, due to GDPR etc, and it is not the Employers place, to highlight a tax issue, as they are legally obliged to use what Revenue provides to them, not to do so, is illegal.

Employers have no access to change an Employees tax credits, standard rate bands, or USC bands. best practice, is to double check your revenue details, when they are issued around December each year, in advance of the incoming new tax year.
But the thing is that it looks like the detail revenue provided is correct and for USC its based on gross salary so tax credits dont appear to have any impact.
Revenue clearly called out the bands and corresponding percentages. Im not sure why payroll didnt increase deduction but i will check with them tomorrow.
You mention live data from revemue, is thst based on latest tax cert or something else? The only relevant document that i see is tax cert when i look online. Is this what the employer should also reference?
I appreciate that im ultimately responsible but i think its reasonable to expect a large multinational to get this correct, assuming revenue provided the correct details.
I will however now be checking 2024 as I go so that im aware of any underpayment in advance.
Any guidance on how i approach this with the company is appreviated. If the issue lies with how they processed data then there may be others impacted. Obv i need to confirm root cause with them.
 
Your employer is legally required to use your latest RPN (Tax Certificate), these should be automatically downloaded from ROS each time they run the payroll. At the end of the day it is always the employee's responsibility to ensure the correct tax is paid. The values used are required to be printed on your payslip.

As others have said 2% is the reduced rate, which can be paid for various reasons.
 
If an employer believes the tax credits on the Revenue system are incorrect they are completely permitted to advise the employee.
How would they be in a position to form such an opinion?

Their role is merely to process the real-time figures provided by Revenue.

They have no business enquiring into the personal circumstances of an employee.
 
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I am seeing USC Underpayments for staff stemming from the covid19 subsidy which employers availed of. It caused some issues which have surfaced from 2020 onwards
 
I think that
Your employer is legally required to use your latest RPN (Tax Certificate), these should be automatically downloaded from ROS each time they run the payroll. At the end of the day it is always the employee's responsibility to ensure the correct tax is paid. The values used are required to be printed on your payslip.

As others have said 2% is the reduced rate, which can be paid for various reasons.


Ok thank you. Ive just checked tax certs and the following taxcerts issued

1) issued in jan stating
- Income chargeable at 0.5% 12,012
- Income over 12,012 in this employment chargeable at 2%

2) then in October an amended tax cert was provided
- Income chargeable at 0.5% 12,012
- Income chargeable at 2% 10,908
- Income chargeable at 4.5% 47,124
- income over 70,044 in this employment chargeable at 8%


I moved to this employer in 2022, so that could explain the first tax cert.
However the amended tax cert should have been picked up by employer right?
Even if they didnt have enough time to process for Nov payroll , should it have been used for Dec? Like they increased from 2% but still did not take nearly enough USC.
Was the onus on the employer to use this?

To note i did owe revenue taxes for 2020 due to covid and receipt of TWSS with previous employer and they took that out if a tax refund i had for that year when i did my taxes.
 
I moved to this employer in 2022, so that could explain the first tax cert.
However the amended tax cert should have been picked up by employer right?
Even if they didnt have enough time to process for Nov payroll , should it have been used for Dec? Like they increased from 2% but still did not take nearly enough USC.
Was the onus on the employer to use this?

It's a real time system. Revenue provide the figures to the employer and it's mandatory to use their figures. In the vernacular, it's literally a "computer says no" system.

Obviously something has gone wrong here, but your beef is with Revenue, not your employer.
 
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I think that



Ok thank you. Ive just checked tax certs and the following taxcerts issued

1) issued in jan stating
- Income chargeable at 0.5% 12,012
- Income over 12,012 in this employment chargeable at 2%

2) then in October an amended tax cert was provided
- Income chargeable at 0.5% 12,012
- Income chargeable at 2% 10,908
- Income chargeable at 4.5% 47,124
- income over 70,044 in this employment chargeable at 8%


I moved to this employer in 2022, so that could explain the first tax cert.
However the amended tax cert should have been picked up by employer right?
Even if they didnt have enough time to process for Nov payroll , should it have been used for Dec? Like they increased from 2% but still did not take nearly enough USC.
Was the onus on the employer to use this?

To note i did owe revenue taxes for 2020 due to covid and receipt of TWSS with previous employer and they took that out if a tax refund i had for that year when i did my taxes.

Regaring the point should the adjustment been picked up by the employer. This would depend on what tax status you were on. Sometimes particularly when the credit are changed later in the year you may be moved onto a week one month one basis. This means each payslip is viewed in isolation rather then the normal basis where they are viewing on a cumulative basis. This might be done if Revenue fear carrying out the adjustment over a small number of payslips would leave the taxpayer in a bad cashflow position. If you look you at the pay slips later in the year under tax status does it say N or W1?
 
Even if they didnt have enough time to process for Nov payroll , should it have been used for Dec? Like they increased from 2% but still did not take nearly enough USC.
Was the onus on the employer to use this?

To note i did owe revenue taxes for 2020 due to covid and receipt of TWSS with previous employer and they took that out if a tax refund i had for that year when i did my taxes.

It is possible the employer used the new October figures, but Revenue specified they were on a Week/Month 1 Basis.
 
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