How USC works
USC is charged in bands. Each portion of your income is taxed at a different rate. This works the same way as income tax — you do not pay the higher rate on all your income, only on the portion that falls into that band.
What is the difference between PAYE, USC, and PRSI?
PAYE, USC, and PRSI are all deductions that may appear on your Irish payslip, but they each serve different purposes.
| Deduction | What it is | What the money is used for |
|---|---|---|
| PAYE | Income tax | General government spending and public services |
| USC | Universal Social Charge | Additional state funding for public finances and services |
| PRSI | Social insurance contribution | Benefits such as the State Pension, Jobseeker’s Benefit, and Illness Benefit |
Learn more about PAYE and PRSI, or compare estimated PAYE, USC and PRSI for both years with the Irish Salary Calculator.
USC rates in 2026
| Annual income | USC rate |
|---|---|
| €0 – €12,012 | 0.5% |
| €12,013 – €28,700 | 2% |
| €28,701 – €70,044 | 3% |
| Over €70,044 | 8% |
Source: Revenue.ie — Standard rates and thresholds of USC 2026 ↗
USC rates from 1 January 2027
Budget 2027 provides for the 2% band to extend to €30,300 from 1 January 2027. The annual exemption remains €13,000 and the 3% band still ends at €70,044, as confirmed in the corrected Department of Finance publication (12 October 2026). These are future Budget measures, subject to the legislative process, and do not apply to 2026 income.
| Income band | 2027 rate |
|---|---|
| €0 – €12,012 | 0.5% |
| €12,013 – €30,300 | 2% |
| €30,301 – €70,044 | 3% |
| Over €70,044 | 8% |
Source: Department of Finance — Budget 2027 taxation measures.
USC exceptions: If annual income does not exceed €13,000, USC is not due; above that limit it applies to all chargeable income, not just the excess. At income of €60,000 or less, people aged 70 or older, or holding a full medical card at any time in the year, qualify for 0.5% on the first €12,012 and 2% on the balance. A GP visit card does not qualify; above €60,000 standard rates apply. Contact Revenue to arrange medical-card treatment. Non-PAYE income above €100,000 attracts an extra 3% surcharge on the excess (normally 11% combined USC on that slice). DSP payments and certain other income are exempt. These rules apply in 2026; the medical-card concession is already extended through 31 December 2027 under Finance Act 2025.
Source: Revenue — Medical-card USC extension through 2027.
Source: Revenue — Reduced USC rates.
Source: Revenue — Other USC rates.
Worked example
Here is how USC is calculated for someone earning €40,000 per year using the 2026 bands.
| Income band | Amount in band | Rate | USC due |
|---|---|---|---|
| €0 – €12,012 | €12,012 | 0.5% | €60.06 |
| €12,013 – €28,700 | €16,688 | 2% | €333.76 |
| Balance above €28,700 | €11,300 | 3% | €339.00 |
| Total USC due | €732.82 | ||
This is an example only. Your USC will depend on your exact income and circumstances. Calculation based on Revenue.ie USC calculation method ↗
What this means in real life
In real life, USC is a separate deduction from PAYE and PRSI, so a person can have little PAYE after tax credits and still see USC on a payslip. It is calculated using USC bands and rates rather than the income tax rate bands. Crossing into a higher USC band does not apply that higher rate to all income; it applies to the portion within that band. Pension contributions generally do not reduce USC in the same way they can reduce income tax, which can make the deduction look different from PAYE. Annual income below the exemption threshold may be treated differently, but payroll calculations depend on the information and basis in use. The USC versus PRSI guide explains why the two deductions appear separately.
Common confusion
USC trips people up for a few predictable reasons. Here are the ones that come up most often.