USC Question

Sundance_Kid

Hi,

I am just trying to get a better understanding of the USC charge on my payslip.

Until mid/late June I was paid monthly, then I moved job and am now paid weekly.

The USC rates per my latest Tax Credit Cert are

Income charged at 2%
Yearly - €10,036
Monthly - €836.34
Weekly - €193.00

Income charged at 4%
Yearly - €5,980
Monthly - €498.34
Weekly - €115

Income over €16,016 is chargeable at 7%

Is USC calculated depending on whether you are paid monthly or weekly?

So using the above figures, if I earned say €16,000 at this stage of the year it would NOT be a case of €10,036 of that being taxed at 2% and €5,964 being taxed at 4%?

Like I worked out my gross salary for the year so far and did 2% on the first €10,036, €5,980 at 4% and the difference at 7% but it turns out I have paid more USC then what I calculated which has made think that in most payslips I am going to get hit with the 2%,4% and 7% charge because it is calculated monthly or weekly depending on how I am paid.

Thanks

namenotavailablE

The annual thresholds (10036,5980) are spread out equally over the year and accumulate each pay period.

So for example, for someone who is paid monthly, the monthly amount of income charged at 2% is €10036/12= €836.34 for each pay period and the monthly amount of income charged at 4% is €5980/12= €498.34. Any remaining monthly income is charged at 7%.
Say your gross income per month is €2,000. In month 1, the USC is calculated on €836.34 @ 2%, €498.34 @ 4% and the remainder (2000-836.34-498.34 = €665.32 x 7% = €46.57. This gives a total USC paid for month 1 of €83.23 (€16.73+€19.93+€46.57).

For month 2, you use cumulative income and threshold figures to do the same calculation, so assuming that you earned exactly the same gross, the calculations would be as follows (using total year to date income of €4000):

1672.68 (i.e. 2 thresholds of €836.34) x 2% = 33.45
996.68 (i.e. 2 thresholds of €498.34) x 4% = 39.87
1330.64 (i.e. 4000 total year to date income - 1672.68-996.68) x 7% = 93.14

The total year to date USC due is therefore €166.46 (€33.45+ €39.87 +€93.14) but as you already paid €83.23 in month 1 this means that your month 2 deduction is the difference between €166.46 and €83.23 i.e. €83.23.

It's the same basic principle whether monthly or weekly paid.