Universal Social Charge (USC)

How USC affects redundancy payments

Statutory redundancy payments are exempt from USC where these payments:

  • amount to two full weeks of pay per year of service, plus a bonus week
  • and
  • are subject to a maximum of €600 per week.

Ex-gratia redundancy payments 

Ex-gratia redundancy payments above the statutory redundancy amount are exempt from USC up to certain limits.

Basic exemption

The limits are €10,160, plus €765 per full year of service in excess of statutory redundancy.

Increased exemption

The basic exemption can be further increased by up to €10,000, subject to certain conditions. There is more information in Taxation Treatment of Termination Payments on Retirement or Removal from Office or Employment.

There is a lifetime exemption limit of €200,000 on ex-gratia payments.

Redundancy payment over the limits

USC is payable on any redundancy payments above these limits, after any extra deduction for Standard Capital Superannuation Benefit (SCSB).