With effect from 1 January 2011 income and health levies have been merged into a single charge called the Universal Social Charge.

The USC is payable on gross income from all sources, including notional pay, after any relief for certain capital allowances, but before pension contributions

The rates of the Universal Social Charge are:

• 2% on the first €10,036
• 4% on the next €5,980
• 7% on the balance

Persons aged over 70 years of age are not liable to the 7% rate and instead pay 4%.

A 10% rate is paybale by self employed people who earn over €100,000. 

On a monthly basis this equates to the following :

• 2% on first €837 (= €16.74)
• 4% on next €497.99 ( = €19.92)
• 7% on balance

So if your income is more than €1,334.99 per month you pay €36.66 per month plus 7% of the excess.

For Example :

Individual earns €60,000 per annum which is €5,000 per month.USC payable is €293.21 (€5000 - 1334.99 = 3665.01 x 7% = €256.55 + €36.66 = €293.21)

Income subject to DIRT and all social welfare payments are exempt. A person is exempt if their total income is less than €4,004 per annum.

For more information visit http://www.revenue.ie/en/spotlights/universal-social-charge.html

An explanatory video published by the Irish Revenue on the main features of the Universal Social charge affecting PAYE workers announced in Budget 2011

http://www.youtube.com/watch?v=pwFESnEjakI&feature=player_embedded