USC threshold increasing due to rise in minimum wage
The threshold for USC is to be raised to allow for a previously announced increase in the minimum wage.
This will benefit all taxpayers as well as ensuring those on the minimum wage will continue to pay USC at a maximum rate of 2%.
Last month the government announced it had decided to raise the minimum wage, given strong earnings growth across the economy and greater clarity over Brexit.
The decision had been postponed at the time of the Budget given concerns at that time over the UK crashing out of the EU.
The increase of 30c had been recommended by the Low Pay Commission.
The PRSI threshold was also increased to allow those on the minimum wage working a 39 hour week to earn up to €20,483 per annum.
The second part of this process was the announcement by the Minister for Finance today to raise the threshold on the 2% USC band which will also kick in from February 1st.
This means the maximum rate of USC contributions paid by those on the minimum wage remains 2%.
The move will directly benefit 127,000 workers on the minimum wage.
This is the fifth year in a row that the minimum wage has been raised. Ireland has the third highest minimum wage in the EU.
The move on USC will also benefit taxpayers earning above the minimum wage.
By how much, depends on what you earn. The maximum benefit will be 29c per week or €15.25 per annum.
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