Universal Social Charge (USC) is a tax on income. Some income is exempt from USC calculations.
This article explains which income types are exempt.
Cause
Resolution
Income types are exempt from USC calculations:
All Department of Social Protection payments. This includes Maternity Benefit, Paternity Benefit, and state pensions
Social welfare payments, including those received from abroad
Payments made as part of Community Employment schemes
The Back to Education Allowance
Student grants and scholarships
Certain salary sacrifice schemes. This includes the TaxSaver Commuter Ticket Scheme and the Cycle to Work scheme
Statutory redundancy payments
If your employee’s yearly gross income is less than €13,000.00
NOTE:
Your employee's yearly gross income may be less than €13,000. If Revenue has not exempted the employee, you still need to deduct USC from their earnings. Revenue will refund the employee.