Know Your Rights: National Minimum Wage And USC

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Know Your Rights has been compiled by Kerry Citizens Information Service which provides a free and confidential service to the public…

Question: I’m a full-time minimum wage PAYE worker. Does the increase in the national minimum wage mean that I pay more Universal Social Charge?

Answer: The minimum wage increased from €9.80 to €10.10 on 1 February 2020. A person working full-time (39 hours per week) and earning the minimum wage was previously earning €19,873 per year. They now earn €20,484 per year.

From 1 February, USC rates also changed slightly to make sure that this increase in pay for minimum wage workers is not subject to the 4.5% USC charge.

Continued below…


This was done by increasing the income threshold of the 2% band. The new thresholds now look like this:


So, in 2019, if you earned €19,874, your total USC for the year was ({0.5% of €12,012} €60.06 + {2% of €7,862} €157.24) = €217.30. This meant your USC was €18.11 per month, or €4.18 per week.

From 1 February 2020, if you earn €20,484 per year, your annual USC will be ({0.5% of €12,012} €60.06 + {2% of €8,742} €169.44) = €229.50. This means your USC is €19.13 per month, or €4.41 per week.

So, with the increase in the national minimum wage, you will pay €12.20 more USC per year. This deduction will be made from your gross salary. Your increased salary will continue to be subject to the standard rate of income tax. This means you also pay slightly more income tax after 1 February 2020.

Further information is available from the Citizens Information Centre below.

• Contact us in Tralee on Tel: 0761 07 7860 Killarney 0761 07 7820, Listowel 0761 07 7840 Kenmare 0761 07 7810, & Caherciveen 0761 07 7780. Outreach Services; Killorglin weekly, Dingle monthly, please call Tralee for more information.

Information is also available online at and from the Citizens Information Phone Service, 0761 07 4000

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