Universal Social Charge keeps increasing

kassie

Can anyone shed any light on why my USC would keep increasing?

I was on maternity leave from Mid Sept 2013 to End of April 2014 and since i came back to work there has been an issue with my wages! I don't receive any wages/payment from my employer on maternity leave so was just claiming Maternity Benefit directly to my own bank account.

My wages were approx €40 more than normal on my return and i contacted revenue to confirm that this was tax back due to me while on maternity leave. They confirmed it was. Approx 8 weeks later i contacted them again to see when this was going to run out (as i was fearful that it would run over and i would end up owing the rev money!). The person i spoke to this time told me that i wasn't entitled to tax back from maternity leave as maternity leave is now taxable. Put the heart crossways in me but it turned out that my tax credits covered the amount paid to me and i didn't owe them anything and she told me that it was now resolved.

My wages then dropped below what was normal, €6 less every week. It was like that for the last 7 weeks and now today its dropped to €11 less every week. the only difference i can see on my payslip is that the USC has gradually increased over my return to work from nil right up to today to €20.43.

I'm contacting the revenue directly but don't hold out much hope in getting a straight answer from them as i've been given contradicting information every time i ring them. I'll prob end up being ever more confused than i am now!

Anyone any ideas?

Alan Shore

Income tax and USC work on a cumulative basis.

As maternity benefit is not subject to USC you built up a portion of your salary at 2% for longer than normal. As you earn more during the year the amount that is subject to the higher rate increases.

Normally someone can earn €193 per week at 2% USC but you would have built up €193 x 13 when you returned to work. So instead of paying 4% and 7% at the start you only paid 2% now you have caught up and are paying the higher rates.

barneystinson

kassie wrote: »

Can anyone shed any light on why my USC would keep increasing?

I was on maternity leave from Mid Sept 2013 to End of April 2014 and since i came back to work there has been an issue with my wages! I don't receive any wages/payment from my employer on maternity leave so was just claiming Maternity Benefit directly to my own bank account.

My wages were approx €40 more than normal on my return and i contacted revenue to confirm that this was tax back due to me while on maternity leave. They confirmed it was. Approx 8 weeks later i contacted them again to see when this was going to run out (as i was fearful that it would run over and i would end up owing the rev money!). The person i spoke to this time told me that i wasn't entitled to tax back from maternity leave as maternity leave is now taxable. Put the heart crossways in me but it turned out that my tax credits covered the amount paid to me and i didn't owe them anything and she told me that it was now resolved.

My wages then dropped below what was normal, €6 less every week. It was like that for the last 7 weeks and now today its dropped to €11 less every week. the only difference i can see on my payslip is that the USC has gradually increased over my return to work from nil right up to today to €20.43.

I'm contacting the revenue directly but don't hold out much hope in getting a straight answer from them as i've been given contradicting information every time i ring them. I'll prob end up being ever more confused than i am now!

Anyone any ideas?

Here's an idea, ask your employer (who is actually the one operating the PAYE system on your wages) instead of Revenue (whose staff can't see your payslips and therefore can only speculate)...!

kassie

Thanks Alan for your reply, it was a big help - the Revenue didn't explain it like that, but it makes a lot more sense put like that, thank you!

Barney - your reply was not appreciated! I have been talking closely with my employers accounts dept and they advised me to ring Revenue

GrumpyMe

kassie wrote: »

...
Barney - your reply was not appreciated! I have been talking closely with my employers accounts dept and they advised me to ring Revenue...

I think you are being a bit hard on Barney. Revenue issue tax certs to employers (and copy the tax payer). It is the employer's responsibility to apply the tax code, pay you and collect/remit the correct tax (inc PRSI + USC). Revenue don't get details of what has happened in individual cases each week/month until they get a P35 at end of tax year and even then it is just a summary! The Revenue can probably accurately guess how your employer paid and taxed you each week/month.

It is your employers responsibility to do the calculations throughout the year. They should be doing it according to the rules and they should know what they are doing!

If your employer isn't capable of explaining how they themselves applied the tax code to your wages/salary I'd be concerned that they may not be doing it correctly or at least don't know if they are doing it properly or not! Not an ideal situation!:mad:

barneystinson

kassie wrote: »

Thanks Alan for your reply, it was a big help - the Revenue didn't explain it like that, but it makes a lot more sense put like that, thank you!

Barney - your reply was not appreciated! I have been talking closely with my employers accounts dept and they advised me to ring Revenue

Sorry Kassie

But your accounts department are either incompetent or lazy if they couldn't have explained that to you. The person in your accounts Dept should have been able to give you the explanation Alan did - a payroll clerk who can't understand the cumulative nature of the tax/USC bands, isn't much of a payroll person... (and BTW I would actually have been more helpful and included the answer in my reply except that he'd already given you the reason!).