What changes to expect to see in your salary in 2016?

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Some good news, everyone should see an increase in their net pay from January 2016. This is due to the changes in the rate and thresholds of the Universal Social Charge (USC).

The rates have changed as follows:

USC Thresholds & Rates
2016		2015
Threshold	Rate	Threshold	Rate
Income up to €12,012	1%	Income up to €12,012	1.5%
Income from €12,012 to €18,668	3%	Income from €12,012 to €17,576	3.5%
Income from €18,668 to €70,044	5.5%	Income from €17,576 to €70,044	7%
Income above €70,044	8%	Income above €70,044	8%

For example, the net pay increase on an average salary of €40,000 p.a. would result in the following additional salary:

Annual	€452
Monthly	€38
Weekly	€9

 

 

 

 

 

(The above example is based on basic salary of €40,000 per annual with no allowable deductions such as pensions etc.)

It should also be noted that there is a surcharge of 3% on individuals who have non-PAYE income that exceeds €100,000 in a year.

A further bonus for the Self Employed

A new Earned Income Tax Credit has been introduced for 2016. The tax credit is calculated at 20% of an individual’s earned income (excluding earned income that is taken into account for the PAYE Tax Credit) subject to a maximum of €550. Where an individual has earned income that qualifies for Earned Income Tax Credit and PAYE Tax Credit, the combined tax credits cannot exceed €1,650.

Sarah Dunne is a Manager in OSK Audit. Contact OSK Accountants and Tax Advisers for further details on the changes to the Universal Social Charge for 2016.

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• Universal Social Charge