At present, earnings under €10,036 in a tax year are exempt from Universal Social Charge (USC). This threshold will rise to €12,012 in Tax Year 2015.
Many part-time employees earning less than €10,036 are charged USC and have to claim a refund at the end of the tax year.
Employees in this situation should check their payslips and see if they are currently being charged USC. If USC has been charged and total earnings for the year are less than €10,036, an application for a P21 Balancing Statement should be made to the Revenue Commissioners. If all earnings have been earned through the normal PAYE system, the easiest way to process this claim is by the online PAYE Anytime system. Registration is available at http://www.revenue.ie
Some employees have received exemption from USC on the basis that their earnings in previous years were under the earnings exemption threshold. If an employee who has this exemption has worked extra hours in the current tax year and their earnings are likely to exceed the €10,036 exemption threshold, he or she should contact Revenue immediately and inform them of the changed circumstances. Unfortunately, if earnings exceed €10,036, all the earnings become liable to USC, not just the amount over €10,036. Therefore it is important to correct this as soon as possible to avoid a nasty underpayment surprise at the end of tax year e.g. if an employee with USC exemption by virtue of their earnings earns €10,500 in 2014, they would owe €10,500 x 2% = €210
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