The Universal Social Charge (USC) was introduced in Finance Act 2011 and applies for the tax year 2011 and subsequent tax years.
The yield for each year is
2011 - €3,114m
2012 - €3,790m
2013 - €3,930m
USC is a tax payable on gross income, including notional pay, after any relief for certain trading losses and capital allowances, but before pension contributions. It is not charged on social welfare and similar type payments, or on income which was already subjected to DIRT. Since its introduction it has not been altered to include other financial areas.
The original estimate of universal social charge payable in 2011 was €3,238m.
Changes made since its introduction are
An increase in the exemption limit from €4,004 to €10,036,
Elimination of the reduced rates that applied to medical card holders and individuals aged 66 and over whose income exceeds €60,000,
Non application of the charge to amounts received by individuals who avail of pre-retirement access to an AVC,
Application of the charge to income relieved from income tax under the special assignee relief programme, and
Non-application of the 3% surcharge, on non PAYE incomes over €100,000, to share options.
When originally introduced, the USC was collected by employers from employees on a week 1 basis which led in certain cases to underpayments by the employee. From 1 January 2012 it has been collected on a cumulative basis which ensures that the correct amount of USC is collected from an employee throughout the year.
