Understanding the Universal Social Charge (USC)
Everything you need to know about USC - rates, exemptions, and how it's calculated.
What is USC?
The Universal Social Charge (USC) is a tax on income that was introduced in Ireland in 2011. It replaced the Income Levy and Health Levy and applies to most forms of income including wages, salaries, pensions, and self-employment income.
Unlike income tax, USC is charged on your gross income - before any pension contributions or other deductions. This means you can't reduce your USC bill by contributing to a pension (though this does reduce your income tax).
Key Point: USC is separate from income tax and PRSI. It's an additional charge that most employees pay on top of their income tax.
USC Rates and Bands (2025)
USC is charged at different rates depending on your income level. The standard rates for 2025 are:
| Income Band | Rate |
|---|---|
| First €12,012 | 0.5% |
| €12,012.01 to €25,760 | 2% |
| €25,760.01 to €70,044 | 4% |
| Over €70,044 | 8% |
These rates apply cumulatively - you don't pay 8% on all your income if you earn over €70,044. Instead, you pay the lower rates on each portion of income within each band.
Who is Exempt from USC?
You are fully exempt from USC if your total income for the year is €13,000 or less. This exemption applies to all types of income.
However, if your income exceeds €13,000 even by €1, you must pay USC on your entire income (not just the amount over €13,000).
Example
- Income of €13,000: No USC payable (exempt)
- Income of €13,001: USC payable on all €13,001
Reduced Rates
Certain individuals qualify for reduced USC rates:
Medical Card Holders
If you hold a full medical card and your income is €60,000 or less, you pay a maximum rate of 2% on all your income.
Age 70 and Over
If you're aged 70 or over and your income is €60,000 or less, you also qualify for the reduced 2% maximum rate.
| Income Band | Reduced Rate |
|---|---|
| First €12,012 | 0.5% |
| All remaining income | 2% |
USC Calculation Example
Let's calculate the USC for someone earning €50,000 per year:
This works out to approximately 2.6% of total income - your effective USC rate.
Income Types Subject to USC
USC applies to most types of income, including:
- Wages and salaries
- Bonuses and commissions
- Pension income
- Self-employment income
- Rental income
- Dividend income
- Social welfare payments (some exceptions apply)
Income NOT Subject to USC
- Social welfare payments (most types)
- Income already subjected to DIRT (deposit interest)
- Certain illness and disability payments
USC vs Income Tax: Key Differences
| Feature | Income Tax | USC |
|---|---|---|
| Tax Credits | Yes - reduces tax | No credits available |
| Pension Relief | Yes - at marginal rate | No relief |
| Exemption | Based on credits | €13,000 threshold |
| Max Rate | 40% | 8% |