Universal social charge
The universal social charge was introduced during the financial crisis to raise additional revenue. It applies with minimal allowances and exemptions. It is payable under PAYE or as part of self-assessment tax payments for persons including proprietary directors
- 0 to €12,012 .5%
- €12,013 to €19,372 2%
- €19,373 to €70,044 4.75%
- €70,045+ 8%
- €100,000 + for self-assessed taxpayers 11%
Individuals aged over 70 and those in possession of a full medical card pay a maximum of 2% above €12,012 where their aggregate income is less than €60,000.
Pay-related social insurance is the Irish equivalent of national insurance contributions. The most common class is class A in espect of employees. There are employer and employee contributions in respect of class A.
Class S applies to self-employed persons and proprietary directors. It is a 4% contribution. The benefits available are significantly less.
The employee contributions for class A are 4% above €352 per week. Employers contributions are 8.6% below €376 per week rate
There are relatively few deductions and no credits for PRSI. Employees earning less than €352 per week do not pay PRSI. Employer’s pay a reduced rate of 8.6% below €376 Euro per week.
Employee contributors who also have separate income for which they are self-assessed pay PRSI on unearned income. It is applicable to non-employment income in excess of approximately €5,000 per year. It is subject to PRSI at 5%.
Share awards options and revenue approved schemes are subject to employee PRSI. Share-based remuneration is usually exempt from employer PRSI but may be liable to USC.
When a person leaves employment is employer must give a form P45 showing earnings and tax deductions for the year. Where a person leaves mid-year, he may have overpaid tax as the tax credits and rates eapply for the whole calendar year. The employee may apply to Revenue, make a tax return and be repaid any overpayment.
Where a person leaves Ireland, he may still have an obligation to make a return in the normal way as set out above. He should notify Revenue of his departure from the State.
Lump-sum payments in connection with the termination of employment are taxed to the extent that they exceed an exemption. The extent of the exemption is based on the length of service. There is provision for a tax-free amount in excess of the basic amount subject to an overall €200,000 and on a lifetime basis.