How to calculate usc in ireland?

The Universal Social Charge is tax you pay on gross income, including notional pay (notional pay is a non-cash benefit, such as benefit-in-kind), after any relief for certain capital allowances. The USC is payable on pension contributions.

If your total income is €13,000 or less per year, you do not pay any USC. If it is more than €13,000 per year, you pay USC on your full income.

For married couples or civil partners, each spouse or civil partner is treated individually by their employer or pension provider throughout the year.

Liability for the USC depends on the date of the payment rather than on when the income was earned.

Although you may not have to pay income tax based on your entitlement to tax credits or by use of losses or capital allowances, you may still have to pay the Universal Social Charge on your income.

Some sources of income are exempt from income tax but are liable to the Universal Social Charge. These include income from:

You do not pay the USC if your total income for a year is €13,000 or less. (If your income is €60,000 or less, there is a reduced rate if you are aged 70 or over or a medical card holder.)

All Department of Social Protection payments, including Maternity Benefit, Paternity Benefit and State pensions, are exempt from the Universal Social Charge. Similar payments, such as payments made as part of Community Employment schemes or the Back to Education Allowance, are exempt. Social welfare or similar payments made from abroad are exempt. Student grants and scholarships are also exempt.

Income where DIRT (Deposit Interest Retention Tax) has already been paid is exempt from the USC.

There are a number of other exemptions. These include:

You can find more information about USC exemptions on revenue.ie.

Statutory redundancy payments are exempt from the charge. Statutory redundancy payments amount to 2 weeks’ pay per year of service plus a bonus week, subject to a maximum payment of €600 per week. In addition, redundancy payments above the statutory redundancy amount are exempt from the Universal Social Charge, up to certain limits. These limits are up to €10,160 plus €765 per complete year of service in excess of the statutory redundancy. This basic exemption can be further increased by up to €10,000 if the person is not a member of an occupational pension scheme.

The Universal Social Charge is charged on liable income after the statutory exemptions above, and after any additional deduction for Standard Capital Superannuation Benefit (SCSB).

How maintenance payments are treated for Universal Social Charge purposes depends on whether they are voluntary payments or legally enforceable payments.

Voluntary maintenance payments (payments paid under an informal arrangement):

Legally enforceable maintenance payments (payable under legal obligation):

In the case of a legally enforceable maintenance arrangement, where a separated couple has jointly elected to be treated as a married couple for income tax purposes, the spouse making the payments does not receive exemption from the Universal Social Charge on the portion of their income that they pay as maintenance. The spouse who receives the payments is not subject to the Universal Social Charge on the maintenance payments that they receive.

An employer’s or pension provider’s contribution to an approved retirement benefit scheme is not liable to the Universal Social Charge, but an employee's contributions are. Since 1 January 2016, employer contributions to your Personal Retirement Savings Account (PRSA) are no longer subject to USC. Up to 31 December 2015, these contributions were subject to USC.

There was a very small adjustment announced to the Universal Social Charge (USC) in Budget 2023

In 2023 the USC threshold was raised in line with the increase to the minimum wage. The ceiling of the 2% USC band increased by €1,625 to €22,920 from Jan 1st 2023.

Self -employed workers with an income over €100,000 : have a 3% surcharge (so they pay 11% USC)

(People with Income under €13000 are exempt from USC)

An example:  Someone earning €50,000 per year will pay the €1497 Universal Social Charge in 2023.

More details of Take Home Pay and Budget 2023

Reduced rates of USC apply to some people who:

The lower rates are :

The reduced rates apply for the whole year when you reach the age of 70 and your total income is €60,000 or less.

If you hold a medical card you should tell Revenue to ensure you are on the reduced rate.