Budget 2027 brought a reduction in the 3% USC rate, which falls to 2.5% from 1 January 2027. Every other rate and band remains unchanged from 2026. For most earners the change is modest in cash terms but it continues the gradual unwinding of USC that has been underway since 2015. This page sets out the full 2027 USC rate table, the income bands, and the exemptions that determine who pays USC at all.
2027 USC Rates and Bands in Full
| Income Band | Rate | Notes |
|---|---|---|
| Up to €12,012 | 0.5% | Applies to all income in this band |
| €12,013 to €25,760 | 2% | Applies to income in this band |
| €25,761 to €70,044 | 2.5% | Reduced from 3% in Budget 2027 |
| Above €70,044 | 8% | Unchanged |
| Non-PAYE income above €100,000 | 11% | Self-employed surcharge, unchanged |
The only change from 2026 is the reduction of the third band from 3% to 2.5%. All other rates and band ceilings are identical to 2026. The full USC position feeds into the income tax return and is collected through PAYE for employees or through the self-assessment system for the self-employed.
Who Is Exempt From USC?
USC is not payable by individuals whose gross income does not exceed €13,000 in a tax year. Medical card holders aged 70 or over pay a maximum rate of 2% regardless of income level. Individuals in receipt of a Disability Allowance or similar qualifying payment are also exempt. Department of Social Protection payments are excluded from the USC charge, which means USC applies only to earned income, rental income, and other assessable income rather than to welfare receipts.
How the 2027 Change Affects Different Income Levels
| Annual Income | Approximate USC Saving 2027 vs 2026 |
|---|---|
| €30,000 | €43 |
| €40,000 | €143 |
| €50,000 | €206 |
| €60,000 | €243 |
| €70,044 or above | €266 (maximum saving in this band) |
The saving applies only to income between €25,761 and €70,044. Earnings above €70,044 are still taxed at 8%, and earnings below €25,760 are unaffected. A person earning exactly €70,044 sees the maximum saving of approximately €266 per year. These figures interact with income tax and PRSI to form the overall tax returns position for the year.
USC and the Self-Employed
Self-employed individuals pay USC at the same rates as employees on income up to €100,000. Above that threshold, non-PAYE income — which includes profits from self-employment, rental income, and other passive income sources — carries the 11% surcharge rate. The 2.5% change reduces the USC bill for self-employed persons with income between €25,761 and €70,044, with the same saving as for PAYE employees in that range. Preliminary tax for 2027, due in November 2027, should reflect the new rates.
USC and Medical Card Holders Over 70
The 2% maximum rate for medical card holders aged 70 and over remains unchanged. This means a medical card holder aged 70 or over pays 0.5% on the first €12,012 of income and 2% on all income above that level, regardless of how high total income rises. The 2.5%, 8%, and 11% rates do not apply. This cap has remained in place since 2015 and Budget 2027 makes no change to it.
The History of USC Rate Reductions Since 2015
USC was introduced in 2011 at rates that reached 10% for higher earners. The gradual reduction has brought the main working-age rate from 7% to 2.5% over twelve years. The 8% rate, which applies above €70,044, has proved more persistent. The direction of travel suggests further reductions are likely in future Budgets, but the current year rate is what governs the liability and what should be used for all 2027 payroll and self-assessment calculations.
Questions About USC Rates 2027
Has the USC exemption threshold changed for 2027?
No. The exemption threshold remains at €13,000. Individuals with total gross income at or below that amount pay no USC. The threshold has not changed since 2015.
Does the USC reduction affect the employer’s payroll obligation?
No. Employers are not directly liable for USC – it is an employee charge collected through the PAYE system. The payroll software should automatically apply the 2.5% rate from 1 January 2027 once updated. Employers who run payroll manually need to update their rate tables.
Does USC apply to a pension lump sum?
Lump sums paid on retirement are subject to specific exemption limits and a separate tax treatment. USC does not apply to pension lump sums that are received tax-free under the retirement relief rules. Amounts above the exempt thresholds are subject to income tax but not necessarily USC, depending on the nature of the payment.
Is USC deductible against income tax?
No. USC is not deductible as an expense when calculating income tax. It is a separate charge applied to gross income alongside income tax and PRSI. The three charges are calculated independently and then combined to determine the total tax due.
What is the USC position for a non-resident receiving Irish rental income?
Non-resident landlords receiving Irish rental income are subject to USC on that income at the standard rates, including the 2027 change to 2.5% in the relevant band. The withholding tax mechanism at 20% applies to gross rent but does not discharge the USC liability, which is settled on the annual income tax return.
Are share-based remuneration payments subject to USC?
Yes. Employee share awards, restricted stock units, and share options that are subject to income tax on exercise are also subject to USC at the rates applicable to the year of exercise. The 2027 rates apply to share income arising from 1 January 2027 onwards.
Does the 11% USC surcharge apply to all self-employed income above €100,000?
The 11% rate applies to non-PAYE income above €100,000. This includes self-employment profits, rental income, and investment income. It does not apply to PAYE income for an employee who also has some self-employed income if the PAYE income itself pushes total income above €100,000 — only the non-PAYE portion above the threshold carries the surcharge.
Will USC continue to decrease in future Budgets?
No commitment has been made beyond the current year. The direction since 2015 has been consistent reduction, but each Budget sets its own rates and no multi-year USC schedule has been announced. Planning should use the confirmed 2027 rates for the current year and revisit each October after the Budget announcement.
Applying the 2027 Rates Correctly
The single practical action from Budget 2027 on USC is to ensure payroll systems and self-assessment calculations use the 2.5% rate from 1 January 2027. All other rates and band ceilings are identical to 2026. Applying the old 3% rate in payroll runs will result in over-deduction that the employee can reclaim but that creates unnecessary administration.
How We Help With USC and Income Tax Planning
Correct USC calculation is part of the income tax and payroll work we do for clients. Where USC and income tax interact with other reliefs or with investment income, we review the full position rather than treating each charge in isolation. For individuals approaching the €70,044 threshold or planning income in the year, the combined effect of the USC change alongside the income tax band increase can produce a meaningful saving with the right structuring. Our tax returns service handles this for both PAYE clients with supplemental income and fully self-assessed individuals.
