USC calculation changes from 1st January 2012
Since 1st January 2012 Revenue has changed the way in which USC is calculated. USC is now calculated on a cumulative basis, similar to the manner in which PAYE is deducted. Where an employee’s Gross Income does not exceed €10,036 per annum, no USC liability will arise. This exemption will be stated on the employee’s tax credit certificate for 2012 which is used by the Payroll Team in processing your payroll.
The Team at Paycheck Plus are obliged to process payroll based strictly on the figures stated on the latest tax credit certificate issued by Revenue on your behalf as part of our outsource payroll service. Employers should not accept any information from employees regarding their entitlement to an exemption of USC unless it comes directly from Revenue.
If an employee believes they may earn more than €10,036 in the current tax year and they have already received a USC exemption from Revenue, we would encourage this employee to contact Revenue immediately to change this, as this may result in a high USC liability once this limit has been exceeded.
Where an employee holds a full Medical Card for 2012, they will pay USC at the 2% and 4% on their Gross Income, however since 1st January 2012 employers cannot accept information regarding the medical card directly from employees. The employees must contact their local tax office to request a revised tax credit certificate and the employer must apply as per the revised tax certificate.
Where a medical card holder was charged the higher rate of 7% in a previous pay period in 2012, any USC refund due will be automatically made through Paycheck Plus' payroll processing service when the revised tax credit certificate is applied.
Where an employee is registered as an employee under multiple employments, it is possible for the individual to allocate the USC cut off points between the various employments in any order they wish. Please note that if employees have not been P45’d off from a previous employment, Revenue are automatically allocating the USC cut off points between the employments. The individual should contact Revenue immediately to notify them that they are no longer in that employment and have their USC cut off points allocated to their current employment only.