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USC

  • 23-05-2022 5:57pm
    #1
    stopthevoting
    Registered Users, Registered Users 2 Posts: 270 ✭✭


    I started a new job last December and became liable for USC for the first time, but it was not being paid up to now. This has been sorted out now for the next payslip. Revenue have updated the records to reflect that I am liable to USC and issued an amended tax credit certificate. USC will be about €70 per month.

    I am trying to understand this sentence in a message from Revenue: "The effect of issuing a week 1 basis certificate is that any additional liability due is collected from date of issue and not from 1st January, any liability due for that period is collected after year end."

    Does that mean they are also going to collect back payments now, or are they just going to collect current USC for the rest of the year and then collect back payments after the end of this year? I would prefer if any deductions were spread evenly over the rest of the year rather than one big deduction at the end of the year, but from reading the above sentence I don't understand what will happen.



Comments

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


    A week 1 basis means that they only collect USC on the pay for the current week (or fortnight/ month etc) each time. If you owe for earlier pay periods, it will be collected after the end of the current year. You can find more about the week 1 basis here [link]

    I'd have thought it's a bit unusual to be put on the week 1 basis at this stage of the year but not impossible- that linked page offers possible scenarios where this method is used instead of the normal 'cumulative basis'. It sounds like you were treated as exempt from USC for 2022 up to now on your certificate of tax credits so nothing was being deducted by your employer (correctly, based on your certificate). Now that the situation has been partially remedied, potentially you'd have a massive USC deduction in a single month to 'catch up' for anything not deducted in earlier months- this would likely be very hard to manage so they are 'delaying the pain' (but only delaying it...).

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



  • #3
    stopthevoting
    Registered Users, Registered Users 2 Posts: 270 ✭✭stopthevoting


    Thanks for that explanation. I understand it now. I was confused because it said "collected from date of issue" and "collected after year end".

    Yes, I was being taxed as if I was exempt from USC. This was mentioned in a document in January and I was supposed to inform them if my income was expected to be more than €13,000, but I didn't notice it at the time.



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