Universal Social Charge (USC) Explained

USC is a separate charge on gross income, with four bands: 0.5% on the first €12,012, 2% on the next €16,688, 3% on the next €41,344 and 8% on everything above €70,044. If your total income for the year is €13,000 or less you pay none. Once you pass €13,000, USC applies to all of your income, not only the part above that line.

USC is not reduced by tax credits, and pension contributions do not lower the income it is charged on. Revenue tells employers not to deduct employee pension contributions from gross pay when working out USC or PRSI.

USC rates and bands for 2026

These are the standard rates published by Revenue and Citizens Information as of October 2026. Employees have USC deducted by their employer through payroll. Self-employed people pay it with preliminary tax and the annual return.

Worked examples

Each slice is taxed at its own rate, so the figures build up as follows.

Spread over a year, €1,032.82 on a €50,000 salary is about €86.07 a month, an effective USC rate of roughly 2.1%. On €80,000 the charge of €2,430.62 is an effective rate of about 3.0%. Effective rates stay low because the 8% rate only bites on the slice above €70,044.

Reduced rates for over-70s and medical card holders

You pay only the 0.5% and 2% bands, with 2% applying to everything above €12,012, if your total income is €60,000 or less and either of these applies:

• You are aged 70 or over. If you reach 70 during the year, the reduced rates apply to that whole year.
• You hold a full medical card (or a Health Amendment Act card). A GP visit card, a Drugs Payment Scheme card or a Northern Ireland medical card does not count, and you need to contact Revenue to have the reduced rate applied.

For a 70-year-old on €40,000 the charge is €60.06 on the first €12,012 plus 2% of €27,988, which is €559.76, giving €619.82. Under the standard bands the same income would cost €732.82. Above €60,000 of income the standard rates apply in full, so the concession stops abruptly rather than tapering.

Reports on Budget 2027 say no extension of the medical card concession was announced. Check Revenue's reduced rates page for 2027 once the Finance Bill is passed.

Income that is exempt or charged more

Department of Social Protection payments such as the State pension, Maternity Benefit and Child Benefit are outside USC, as is income that has already borne DIRT. Salary sacrificed under schemes such as Cycle to Work also falls outside USC.

Non-PAYE income above €100,000 attracts an extra 3% surcharge, which gives 11% in total on that slice. This mainly affects the self-employed, and it applies whatever your age. Our self-employed tax basics page shows where it sits alongside income tax and PRSI.

USC on top of tax and PRSI: your marginal rate

USC matters most at the margin, because it stacks on income tax and PRSI. For a single PAYE employee in 2026 the deduction on the next euro earned is the sum of the three, using the 4.35% PRSI rate from October.

Income tax here assumes the full €4,000 of credits has already been used, which happens at €20,000 of pay. The jump at €70,044 is why a pension contribution is worth more to someone near that level than it first appears: it saves 40% tax, but it saves nothing on USC or PRSI. The calculator on this site shows your own mix.

What changes in 2027

Budget 2027 raises the top of the 2% band by €1,600, from €28,700 to €30,300. The 0.5% band, the 8% rate and the €13,000 exemption are unchanged. For someone on €50,000 that moves USC from €1,032.82 to €1,016.82, a saving of €16 a year, because €1,600 is taxed at 2% instead of 3%. The change takes effect for 2027, subject to the Finance Bill. See Budget 2027 tax changes for the whole package.