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The Universal Social Charge (USC) was introduced into effect on 1 January 2011 and replaced the old Health Levy (paid as part of your PRSI deductions) and old Income Levy which are abolished from that date.

The USC is a tax payable on gross income, including benefits from your employer, with no relief for pension contributions.

From 2012, your employer will deduct the USC from your earnings on cumulative basis.

It is deducted at 2%, 4% or 7% and thresholds (see below table) have not changed for 2012.  The only exemptions for paying the USC are an income of under €10,036 per annum (up from €4,004 in 2011).

Medical card holders are also liable for the USC but it is capped at 4%, i,e, they pay 4% on all other earnings above the 2% threshold and none at 7%. On receipt of a full medical card, you should notify Revenue immediately. Revenue will then issue a revised tax credit certificate to your employer. Any refund due will be automatically made by your employer.

2012 Rates (no change from 2011)

What does this mean for you?

It means there shouldn’t be any under or over payments of USC as it is adjusted using the cumulative basis. 

There is now a USC Emergency Basis similar to the Emergency Tax Basis.  The Emergency Rate of USC is 7% and no cut-off points are allowed, i.e. all payments will have USC deducted at 7%.  This will be reported now on your payslip under “Status” holding both Tax and USC status, e.g., E / W, N / N, etc.

P45s & P60s now include your USC details – no USC Certs are issued anymore

P2Cs (tax certificates) will now contain USC rates and cut-off points

As with PAYE tax credits and rate bands, Revenue will notify employers of the USC rates and thresholds to be applied for all employees..

Visit this Revenue page for all details and useful documentation regarding the cumulative change.

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All the best,
The Team at Jefferson | Outsource Your Payroll Today 

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