Universal Social Charge (USC) - Calculations
Some important points relating to the calculation of the Universal Social Charge (USC):
- The Universal Social Charge is collected in the same manner as PAYE and on the same calculation basis
- There is no USC relief on pension contributions
USC is payable on gross income, including Notional Pay, before employee pension contributions.
Employers are notified of the specific USC deduction method for each individual employee in the same manner as they are notified about an employee's PAYE deductions, i.e. on the Revenue Payroll Notification (RPN) on an employee by employee basis.
USC EXEMPTION MARKER
Where Revenue determine that the employee/pensioner’s total annual earnings (from all USC-able sources) will not exceed the USC exemption threshold currently, €13,000, the USC exemption will be stated on the RPN issued by Revenue. This USC exemption marker is an instruction to the employer/pension provider not to deduct USC from payments being made.
Where the employer holds an RPN which does not show exemption and the employee/pensioner advises them that USC exemption applies to them, the employee/pensioner should be instructed to contact their local Revenue office to arrange to have a revised RPN issued. While awaiting a revised RPN the employer should continue to use the RPN currently held.
EMPLOYEES COMMENCING EMPLOYMENT
RPNs will be available in real time for new employees, this will remove the need for the emergency basis in most cases.
CALCULATING USC ON WEEK 53
Where a week 53 occurs an additional period of USC threshold is allocated to the employee on a week 1 basis.
*** Please note, if an employee's normal pay day has changed during this tax year or the preceding tax year, the
additional USC cut off points do not apply. You will need to instruct the software if the additional USC cut off
points are not applicable to an employee. To prevent the additional USC cut off points being allocated go to
Employees > Add/Amend Employees > Select the employee > Click the Revenue Details tab > Tick to
indicate exemptions/exclusions apply > tick to exclude the employee from the week 53 USC concession >
update to save the change.