From 2012 the USC exemption limit will be raised from €4,004 to €10,036 per annum. The other major change to the calculation of the Universal Social Charge is that it will now be calculated on a cumulative basis removing the need for refunds at the end of the tax year.
Wednesday, December 7, 2011
Budget 2012 - Employer PRSI Calculation Change
Budget 2011 abolished PRSI relief in the case of the employee element of PRSI in relation to the employee pension contributions and provided for the abolition of half of the PRSI relief in the case of the employer element of PRSI. In Budget 2012 the relief from employer PRSI on employee pension contributions is now fully abolished. This means that employer PRSI will increase for any employee who makes a pension contribution.
There are no changes in 2012 to the PRSI thresholds and rates.
Budget 2012 - The Highlights
The main points as regards taxation of Budget 2012 are as follows
- 12.5% corporation tax rate remains cornerstone of economic policy
- Introduction of Special Assignee Relief Programme
- Enhancement of R&D tax credit regime targeted at SME’s
- Removal of Employer PRSI relief on pension contributions
- Increase in standard rate of VAT from 21% to 23%
- No change in income tax rates, bands, or credits
- No increase in employee PRSI or USC
- USC exemption level rises to €10,036 from €4,004 in 2011
- Increase in CGT, CAT and DIRT rates to 30%
- Stamp duty on non-residential property reduced to 2%
- Sick Pay Tax Exemptions changed
- PRSI may widen to include rental income
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