Universal Social Charge Ireland
The Universal Social Charge (USC) was introduced in 2011 as part of the Irish government's effort to stabilise public finances during the economic downturn. The USC is a tax payable on your total income, and it funds social welfare programs and services. Understanding the USC is crucial for taxpayers, as it directly impacts your earnings and financial planning. This page provides a comprehensive guide to the Universal Social Charge in Ireland.
Tax on income: USC is a tax payable on your total income
USC and PAYE are not the same: USC Ireland is administered by the Revenue Commissioners, whereas PAYE is deducted from your wages by your employer on behalf of Revenue
What is Universal Social Charge?
The Universal Social Charge is a tax on income that applies to most types of income, including wages, salaries, bonuses, pensions, and self-employment income. USC is calculated based on gross income, before any deductions or exemptions are applied.
How to calculate Universal Social Charge?
You pay the USC if your gross income is more than €13,000 per year. Once your income is over this limit, you pay the relevant rate of USC on all of your income. It is calculated on a weekly or monthly basis. It does not apply to social welfare or similar payments, and there are certain other exceptions.
What is the USC charge for 2024?
You might be wondering, “how much USC should I pay?”
Well, the Irish government announced that the 4.5% USC rate would fall to 4% in 2024. As a result, the standard rates and thresholds of USC in 2024 are:
Threshold for 2024 | Rate |
|---|---|
First €12,012 | 0.5% |
Next €13,748 | 2% |
Next €44,284 | 4% |
Balance | 8% |
The following example from the Revenue website shows how USC is calculated by applying the USC rate bands to your income:
Sadhbh, aged 45, earns €50,000 in 2024. As she earns over €13,000, she pays USC on her full income.
Rate and band | Value |
|---|---|
0.5% on the first €12,012 | €60.06 |
2% on the next €13,748 | €274.96 |
4% on the balance of €24,240 | €969.60 |
Total | €1,304.62 |
Measures announced in the Budget for 2025 included an increase to the upper band of the second rate of USC (2%), to €27,382. Minister Donohoe also announced that the USC rate levied on income up to €70,044 will be reduced from 4% to 3%. These changes will take effect on 1 January 2025.
Who is exempt from USC in Ireland?
Certain individuals may be exempt from or entitled to allowances against the Universal Social Charge, for example:
Medical card holders: individuals with a medical card are entitled to a reduced USC rate or exemption, depending on their income level
Low-income earners: individuals earning below a certain threshold may be exempt from the USC or entitled to reduced rates
Dependent relatives: taxpayers who support dependent relatives may be entitled to certain allowances
Are USC and PAYE the same?
No, the Universal Social Charge (USC) and Pay As You Earn (PAYE) are not the same, although they are both components of Ireland's tax system and are often deducted together from an individual's income by their employer.
USC in Ireland has different rates and thresholds depending on the level of income earned, and it is administered by the Revenue Commissioners. PAYE, however, is tax on income earned from employment, deducted from your wages by your employer on behalf of Revenue.