Working for Work : Chapter 5 : Income Tax & Social Insurance

Income Levy

The Income Levy has been abolished as has the Health Levy, with both being replaced by the Universal Social Charge. (The Income Levy rates were 2% on income up to €75,036, 4% on income between €75,037 and €174,980, and 6% on income in excess of that figure. There was an exemption for medical card holders and those earning less than €15, 028)

The Universal Social Charge (USC)

This charge applies to all annual gross income in excess of €4,004 (E77 a week) and applies to all PAYE workers, even those with Income Tax exemptions.

The USC will be applied as follows to gross income of €4,005 or more: -

• 2% on all gross income up to E10,036
• 4% on gross earnings between E10,037 and E16,016
• 7% on gross income in excess of E16,016

The USC will be applied to all earnings, even those under €4,004. People earning less will have to apply for a rebate at the end of the tax year. (People aged 70 or more, and those holding a medical card, will have a maximum rate of 4% USC, regardless of income)

 

Example

John has gross income of €35,000. The USC will be applied as follows: ‚ €10,036 at 2% = €200.72 ‚ Income between €10,036 and €16,016 (€5,980) at 4% = €239.20 ‚ Balance (€18,984) at 7% = €1,328.88 Total Universal Social Charge: €€1,868.80

People entitled to a full medical card, who were not subject to the Income Levy, are not excluded from the USC, although the maximum rate of 4% will be applied.

Payments made by the Department of Enterprise, Trade and Innovation, such as Community Employment and Jobs Initiative, and which are linked to social welfare payments, are not subject to the charge.

Last Updated: 01/09/2011 ^ back to top