Information Circular No 37/2010 – Pay Implications – Budget 2011

By Industrial Relations Officer

Universal Social Charge (USC) General Provisions

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

 

What is the Universal Social Charge?                                             

The Universal Social Charge (USC) is a tax payable on gross income from all sources, including notional pay, after any relief for certain capital allowances, but before pension contributions.

Who is liable for the Universal Social Charge?                              

All individuals are liable to pay the USC if their gross income exceeds the threshold of €4,004 per annum (€77 per week).

What are the rates and thresholds of the Universal Social Charge?

The rates of USC are:

  • 2% on the first €10,036
  • 4% on the next €5,980
  • 7% on the balance.

 

I have a medical card – do I pay USC on my wages?                     

Persons entitled to a full medical card are NOT excluded from the Universal Social Charge.  The exemption that existed for people who hold a full medical card in relation to income levy is NOT a feature of USC.

 

Will the Universal Social Charge apply to non-domiciles?

Income from Ireland or income sourced from Ireland will be subjected to the Universal Social Charge.

 

 Reductions in Tax Credits and Tax Bands  

The value of Tax Credits and Tax Bands will be reduced by 10% with effect from 1st Jan 2011. 

Tax Credit Tax Year 2010 Tax Year 2011
Single Person €1,830 €1,650
Married Person €3,660 €3,300
PAYE Credit €1,830 €1,650
     
Standard Rate Bands Tax Year 2010 Tax Year 2011
Single/Widowed €36,400 €32,800
Married One Income €45,400 €41,800
Married Two Incomes €72,800 €65,600
     
Trade Union Subscriptions €70 Nil

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