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USC Query

  • 10-10-2018 5:31am
    #1
    Soulsun
    Registered Users, Registered Users 2 Posts: 548 ✭✭✭


    USC query for a full medical card holder.

    Salary is 61k which is 1k over the threshold for the reduced rate of usc.

    Is there anything that can be done to bring the salary back within the usc reduced rate threshold.

    Eg.

    Bike to work scheme
    Pension
    Commuter ticket


Comments

  • #2
    wiggle16
    Moderators, Society & Culture Moderators Posts: 3,022 Mod ✭✭✭✭wiggle16


    No, there is no way to reduce your liability to USC in this way. USC is chargeable on your gross income before any deductions, and your gross income disqualifies you from the reduced rate.

    If you earned €61000 and paid €1000 into a pension each year, then you would be liable to USC and PRSI on €61000 and liable to tax €60000. Deductions apply only to tax.

    You can't bring it into the reduced rate threshold for medical card holders, because you earn more than the threshold and therefore do not qualify for the reduced rate.


  • #3
    Soulsun
    Registered Users, Registered Users 2 Posts: 548 ✭✭✭Soulsun


    wiggle16 wrote: »
    No, there is no way to reduce your liability to USC in this way. USC is chargeable on your gross income before any deductions, and your gross income disqualifies you from the reduced rate.

    If you earned €61000 and paid €1000 into a pension each year, then you would be liable to USC and PRSI on €61000 and liable to tax €60000. Deductions apply only to tax.

    You can't bring it into the reduced rate threshold for medical card holders, because you earn more than the threshold and therefore do not qualify for the reduced rate.


    Thanks for the reply w16


  • #4
    namenotavailablE
    Registered Users, Registered Users 2 Posts: 59,702 ✭✭✭✭namenotavailablE


    Would the salary sacrifice method (bike to work) not work?

    Salary sacrifice is an allowable deduction for USC purposes but it's possible that the HSE qualification criteria don't allow it when assessing full medical card entitlement.

    Free Excel net pay calculator- https://taxcalc.eu/monthlyss/Employee%20PAYE%20calculator.xlsm



  • #5
    wiggle16
    Moderators, Society & Culture Moderators Posts: 3,022 Mod ✭✭✭✭wiggle16


    Did a bit more reading on it... I might correct myself, or I should be more specific rather.

    Have a look at the exemptions section here: http://www.citizensinformation.ie/en/money_and_tax/tax/income_tax/universal_social_charge.html

    No harm in trying. However I believe that as your income is above the threshold in general you will not be entitled to the reduced rate. The salary sacrifice can reduce your charge to USC but may not entitle you to the reduced rate itself.


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