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Explain each of the following terms: (i) PAYE (ii) USC - Junior Cycle Home Economics - Question 10 - 2015
Question 10
Explain each of the following terms: (i) PAYE (ii) USC
Worked Solution & Example Answer:Explain each of the following terms: (i) PAYE (ii) USC - Junior Cycle Home Economics - Question 10 - 2015
Step 1
PAYE
Answer
PAYE, which stands for 'Pay As You Earn', is a system of income tax deduction that is automatically taken from an employee's wages. This deduction is paid directly to the government and is used to fund various state services. By employing this system, taxpayers can ensure that their income tax obligations are met on a regular basis, reducing the burden of a large tax bill at the end of the tax year.
Step 2
USC
Answer
USC, or 'Universal Social Charge', is a type of tax that is applied to income exceeding a certain threshold. Specifically, it pertains to income that surpasses €12,012. This charge came into effect in January 2011 and is intended to fund social welfare services. The USC is structured in a tiered manner, meaning different portions of income are taxed at different rates.