merrion street

Following on from a Government announcement in December to increase the National Minimum Wage by 30c from €9.80 to €10.10 per hour from 1 February 2020, the Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, has today (Friday) confirmed a consequential change to the USC thresholds.   

As a result of the decision to increase the National Minimum Wage, a full time worker with 39 hours of paid work per week will earn €394 per week or €20,483 per annum.

The change announced by Minister Donohoe to the USC threshold will see the current ceiling of the 2% rate raised from €19,874 to €20,484. 

This will ensure that the 2% rate remains the highest rate of Universal Social Charge (USC) that is charged on the income of full time minimum wage workers.

The amendment will be legislated for later in the year as part of the usual Finance Bill 2020 process and in the interim, Revenue have agreed that this will be implemented on an administrative basis for the 2020 tax year.

Minister Donohoe said:

The Government took the decision at the end of 2019 to further increase the National Minimum Wage, in a bid to further support working families, focusing on those in lower incomes. This is the fifth year in a row that the minimum wage has been increased, following the recommendation of the Low Pay Commission. The Government remains committed to ensuring that all work pays well and to reducing excessive tax rates for low and middle income earners.

The amendment to section 531AN of the Taxes Consolidation Act, 1997 that will be included in Finance Bill 2020 will apply as follows: