Employees
Pay Related Social Insurance (PRSI) and the Universal Social Charge are deducted from your gross salary before pension contributions at the same time as PAYE. These charges cover employees for various Social Welfare Benefits, State Old Age Pension and Medical Benefits.
The rate of PRSI payable by employees has been increased to 4.1% on total income from 1st October 2024 (up from 4%) for all those earning above €352 a week.
If you earn between €352.01 and €424 per week, you receive marginal relief via a credit. The maximum credit of €12 is reduced by one-sixth of the amount of your weekly earnings over €352.01.
The Universal Social Charge increases as your income gets higher as follows
- €0 to €12,012 at 0.5%
- Next €15,370 at 2%
- Over €42,662 at 3%
- Remainder at 8%
- For the self employed, an additional 3% for trading income over €100,000 (effective rate of 11%).
These thresholds are applied on a weekly/monthly basis.
TAX SAVING TIP
The amount payable for PRSI is substantial and charged on your gross income. For employees in insurable employment, which covers the vast majority of employees, it is important to check how these charges are applied if you are in receipt of other sources on income such as investment income e.g. rents, deposit interest, dividends etc. This income is not liable for PRSI if you are in insurable employment and do not have self-employment income. If your tax affairs are dealt with through the self-assessment tax system, you should check to ensure that you are not being charged PRSI on non-PAYE income.
EXEMPTIONS FROM The Universal Social Charge
The following are the main exemptions from the Universal Social Charge;
- Individuals whose income for the year does not exceed €4,004 in 2011 and €10,036 for years 2012 and 2013.
- Social Welfare payments and payments in lieu of social welfare
- Income already subject to DIRT
- Rent a Room Relief Scheme
- Child Care Service Relief Scheme
- If you are 70 or over or have a medical card and your income is under €60,000, the reduced rate of 2% on income over €12,102 applies.
The following is a list of income sources which are exempt from USC;
- Interest on savings certificates
- Exemptions from BIK Travel Pass, new bicycle scheme
- Distributions to certain nonresidents
- Payments in respect of personal injuries
- Special trust for permanently incapacitated
- Haemophilia Trust compensation payments
- Hepatitis C compensation payments
- Thalidomide compensation payments
- Exemption in respect of certain payment under employment law
- Foster Care Payment
- Income from Scholarships
- Child Benefit Payments
- Early Childcare Supplement
- Exemption in respect of certain expense payments
- Expenses of members of Judiciary
- State Employees: Foreign Service Allowance
- Employee of certain agencies: foreign service allowances
- Bonus or interest paid under instalment savings schemes
- Certain interest not to be chargeable
- Interest on certain securities
- Certain foreign pensions
- Basic and increased exemption in respect of lump sum payments on retirement or redundancy
- Relief for agreed pay restructuring
- Payments in respect of Redundancy
- Military & other pensions, gratuities and allowances
- Veterans of war of independence
- Sceim na bhFoghlaimeoiri Gaeilge
TAX SAVING TIP
To reduce the effect of the Universal social Charge consider the following;
Married Couples can transfer income earning assets e.g. property, shares, etc, into joint names which may reduce the impact of the levy.
Self-Employed can divide income between spouses to reduce/avoid the higher rates of the income levy.
