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Take Charge of the Universal Social Charge


The Universal Social Charge or USC came into being in January of this year and received as cool a reception from employers and employees as the ice that gripped the country during that time.

A tax that replaced both the income and the health levy, the USC was yet another austerity measure that employees found hard to digest. Employers on the other hand, or perhaps more accurately, payroll departments, grappled with what rates to apply and who was to be impacted by it.

Just as payroll departments are starting to feel comfortable with the operation of this new charge it appears that change is once again on the horizon. At the recent Taxes Administration Liaison Committee (TALC), Revenue advised that we should all expect a change to a cumulative basis for the USC. Essentially the basis of deduction for the USC will change from week-one to a cumulative basis for the tax year 2012.

What will change?

  • Employers' copies of the Tax Credit Certificate (P2C) will display USC thresholds as Cut-off-points, as well as the applicable rates of USC to be charged
  • Employees' Tax Credit Certificates will display USC thresholds in a similar manner to how PAYE Cut-off-points are displayed
  • The P45 Form will also contain data on USC deductions

Ultimately the new changes should make things easier for employers. The change to a cumulative basis of calculation will also allow for a smoother transition for employee’s who move companies during a tax year.

Check out taxback.com’s payroll service should you have any questions about payroll calculations or the USC changes and the implications of these changes