When you work and earn income in multiple countries, keeping track of your social security benefits and contributions can get complicated quickly. However, countries with totalization agreements with the United States have made things easier for U.S. citizens working abroad.
A totalization agreement is an agreement between two countries that eliminates dual social security taxes, resulting in the worker only paying social security taxes to the country in which they are currently employed. In other words, if you work in a country that has a totalization agreement with the United States, you won’t have to pay social security taxes to both the U.S. and the country where you’re working.
As of 2021, the U.S. has totalization agreements with 30 countries. These countries are:
6. Czech Republic
16. South Korea
22. Slovak Republic
27. United Kingdom
30. Totalization agreement with the European Union (for Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, and the United Kingdom)
It’s important to note that each totalization agreement is different, as the agreement dictates how social security benefits are calculated. In some cases, non-U.S. citizens may also be eligible for U.S. social security benefits under these agreements.
If you plan on working abroad or are already working abroad, it’s important to understand whether the country you’re in has a totalization agreement with the United States. If it does, you may be able to save on social security taxes and simplify your finances.
In any case, it’s always best to seek professional advice from an accountant or tax advisor who specializes in international tax law to ensure that you are properly accounting for your social security taxes and benefits.