UNIVERSAL SOCIAL CHARGE

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

Standard Rates of USC applicable to Regular Employees for 2017 are:

Income

Rate

Income up to €12,012.00

0.5%

Income from €12,013.01 to €18,772.00

2.5%

Income from €18,773.00 to €70,044.00

5%

Income above €70,044.00

8%

Standard Rates of USC applicable to Self-employed persons for 2017 are:

Income

Rate

Income up to €12,012.00

0.5%

Income from €12,013.01 to €18,772.00

2.5%

Income from €18,773.00 to €70,044.00

5%

Income from €70,044.00 to €100,000

8%

Income above €100,000

11%

Reduced Rates and Thresholds of USC are as follows:

2017

Individuals aged 70 years or over whose aggregate income for the year is €60,000 or less.

Individuals (aged under 70) who hold a full medical card whose aggregate income for the year is €60,000 or less.

0.5% - Income up to €12,012.00

2.5% - All Income above €12,012.00

Categories exempt from USC:

2017

Where an individual's total income for a year does not exceed €13,000

All Department of Social Protection payments and payments similar in nature to such payments paid by other Government bodies

Income already subjected to DIRT

PAY RELATED SOCIAL INSURANCE

  • A Pay Related Social Insurance (PRSI) contribution is payable in respect of full-time employees and part-time employees and consists of an employer's and, where due, an employee's share of PRSI.
  • PRSI contributions are paid both by employers and self-employed and are used to pay for Social Welfare benefits and pensions.
  • Self-employed persons are liable in respect of income from a trade, profession or from investment income after deductions of capital allowances.
  • Directors who own or control 50% or more of the shares are deemed to be self-employed and liable to pay PRSI at Class S.

PRSI rates payable 2017

Employer

Employee

Class A employees earning:

Less than €376 per week

Greater than €376 per week

8.50%

10.75%

4%

4%

Class S employees, self –employed

N/A

4%

SPECIAL ASSIGNMENT RELIEF PROGRAMME

  • The Special Assignment Relief Programme (SARP) commenced on the 1st January 2012, and will continue to run up until 2020. The SARP operates as an incentive for individuals coming to work in Ireland for the first time. It is available to individuals who are in employment for a minimum of 12 months if they arrived during 2012-2014, and 6 months if they have arrived in 2015 or subsequent years.
  • SARP allows qualifying employees to benefit from an income tax deduction. For the years 2012, 2013 and 2014, the relief is determined as 30% of the employee's income between €75,000 (lower threshold) and €500,000 (upper threshold). For 2015, and subsequent years, the proportion is determined as 30% of an employee's income over €75,000 (i.e. without any upper threshold).
  • The relief applies to both Irish domiciled and non-Irish domiciled employees, and can be claimed for a maximum period of five consecutive years commencing with the year of first entitlement.
  • The employer must be incorporated and tax resident in Ireland or a country where Ireland has a double tax treaty or a tax information exchange agreement.
  • The relief does not extend to USC or PRSI.

FOREIGN EARNINGS DEDUCTION

  • For the tax years of 2012-2017, the Foreign Earnings Deduction (FED) provides a means of tax relief to employees who are Irish residents, but work outside the State in 'relevant countries'. FED is aimed at assisting companies who are expanding internationally.
  • "Relevant state" means Brazil, Russia, India, China or South Africa, Egypt, Algeria, Senegal, Tanzania, Kenya, Nigeria, Ghana, Democratic Republic of the Congo, Japan, Singapore, the Republic of Korea, Saudi Arabia, the United Arab Emirates, Qatar, Bahrain, Indonesia, Vietnam, Thailand, Chile, Oman, Kuwait, Mexico and Malaysia.
  • An employee must work at thirty days over a twelve month period in a relevant country and trips must be for at least 10 days duration to benefit from the tax deduction.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.