From 1 January 2026, updates to the Universal Social Charge (USC Changes) will take effect, impacting payroll calculations for employees across Ireland. These adjustments aim to ease the burden on low- and middle-income earners and align with the increase in the national minimum wage.
New USC Bands and Rates for 2026
- 0.5% on income up to €12,012
- 2% on income from €12,012.01 to €28,700 (up from €27,382)
- 3% on income from €28,700.01 to €70,044
- 8% on income above €70,044
- Exemption: No USC applies if total income is €13,000 or less.
- Medical card holders and individuals aged 70+ with income up to €60,000 continue to benefit from reduced USC rates, max 2%.
- Self-employed surcharge of 3% on non-PAYE income over €100,000 remains unchanged.
Impact on Employers
- Payroll systems will be updated to reflect the new band ceiling of €28,700.
- Employees earning between €27,382 and €28,700 will see a reduction in USC.
- Minimum wage earners (€14.15/hour from January 2026) remain within the 2% USC band.
Action Checklist
- ✅ Update payroll software before January 2026.
- ✅ Communicate changes to employees.
- ✅ Review tax planning for high earners and self-employed individuals.
Need help updating payroll or advising staff on USC changes? Contact our team for expert guidance and compliance support.