Do Minors Get Taxes Taken Out of Their Paycheck? A Guide for US Expat Families

Yes, minors do get taxes taken out of their paycheck just like adults, but the rules differ significantly for expat families. According to IRS Publication 15-T, US employers must withhold Social Security and Medicare taxes (7.65% total) from all employees regardless of age. However, here’s the relief: while minors aren’t completely exempt from taxes, most qualify for significant exemptions that often eliminate their federal income tax liability entirely.

For American expat families, this creates unique scenarios. Your teenager might be working locally in your country of residence, spending summers working in the US, or even working remotely for US companies. Each situation has different withholding rules and tax implications.

The question many expat parents ask is: “Are minors exempt from taxes?” The answer brings good news—minors often don’t owe federal income tax due to low earnings, making most US withholding completely refundable. Whether your child is earning euros in Germany or dollars during US summer visits, most expat families discover their working teens get substantial refunds.

Are Minors Exempt from Taxes? The Real Answer

Minors are not completely exempt from taxes, but they qualify for significant exemptions that often eliminate federal income tax:

What Minors Are NOT Exempt From:

• Social Security tax (6.2% of wages)
• Medicare tax (1.45% of wages)
• Self-employment tax on business income over $400

What Minors Often ARE Exempt From:

• Federal income tax (if earnings under $15,700 for 2025)
• Most state income taxes (varies by state and earnings)

The W-4 Exemption Strategy: If your child expects to earn less than the standard deduction, they can claim “exempt” on Form W-4. This stops federal income tax withholding entirely, meaning larger paychecks and no need to file for refunds.

To claim exempt status, your child must meet both conditions:

• Had no tax liability last year
• Expects no tax liability this year

What Gets Withheld: How Paychecks Work for Minors

Understanding how paychecks work for minors helps families plan better. The withholding rules depend entirely on where your minor child works and what type of employer they have:

US Employment (Summer Jobs, Remote Work for US Companies)

When your teenager works for US employers, they do take taxes out of minors’ paychecks:

• FICA taxes: 7.65% (Social Security 6.2% + Medicare 1.45%) – mandatory for all workers, including under 18
• Federal income tax: Based on Form W-4 completion
• These are automatically withheld regardless of where your family lives

How Much Taxes Are Taken Out of a 16-Year-Old’s Paycheck?

For a typical 16-year-old working in the US:

• Minimum: 7.65% for FICA taxes (always required)
• Federal income tax: 0-15% depending on earnings and W-4 completion
• Total withholding: Usually 8-20% of gross pay

Foreign Employment (Local Jobs Abroad)

When your child works for foreign employers in your country of residence:

• No automatic US tax withholding
• Local country taxes may be withheld per local laws
• Your child is responsible for US tax compliance separately
• Foreign taxes paid can often offset US obligations

Do Under-18s Pay Tax?

Yes, workers under 18 do pay tax, but the amount varies significantly:

• FICA taxes: Always required (7.65%)
• Federal income tax: Often $0 due to low earnings
• State taxes: It depends on the state and income level

Real Examples: How Much Do Minors Get Taxes Taken Out of Their Paycheck?

Scenario 1: Teen Working in Germany (Foreign Employer)

Your 17-year-old earns €8,000 working part-time in Berlin:

• German taxes withheld: ~€1,200 (per German rates)
• US taxes withheld: $0 (foreign employer)
• How much do minors get taxed on this income? Likely $0 after Foreign Tax Credit
• Net result: German taxes paid likely cover US obligations entirely

Scenario 2: Summer Job in the US – How Much Does the Government Take Out?

Your 16-year-old earns $5,000 working summer camp in Colorado:

• FICA taxes: $382.50 (7.65% – always required for minors)
• Federal withholding: $0-300 (depending on W-4)
• Total government withholding: $382.50-682.50 (7.7%-13.7% of gross pay)
• US tax owed: $0 (under standard deduction)
• Refund: $0-300 (gets back any federal withholding)

Scenario 3: Remote Work for a US Company (Living in Singapore)

Your 18-year-old earns $12,000 doing remote work for a US tech company:

• FICA taxes: $918 (7.65% withheld by US employer – do minors pay taxes? Yes, always for FICA)
• Federal withholding: $400-800 (estimated)
• Singapore taxes: Minimal (due to low rates and exemptions)
• How much do minors get taxed in total? Usually just the FICA portion
• Refund: $400-800 (gets back federal withholding)

Scenario 4: High Earner in High-Tax Country

Your 19-year-old gap year student earns €15,000 in France:

• French taxes: ~€2,000
• US tax before credits: ~$500 (on ~$16,500 USD equivalent)
• After Foreign Tax Credit: $0 owed (French taxes exceed US liability)
• Do minors get taxed for working abroad? Often no, due to foreign tax credits

Expat Family Tax Scenarios: What You Need to Know

Your Minor Child Working Locally Abroad

When your teenager works in your country of residence:

• Foreign employers don’t withhold US taxes
• Local country tax rules apply (varies widely)
• Your child may need to make US estimated payments if earning substantial income
• Foreign taxes paid often eliminate US tax liability through the Foreign Tax Credit
• Must report all worldwide income on a US tax return

Your Minor Child Working in the US (Summer/Holiday Jobs)

When your teenager works in the US while your family lives abroad:

• Standard US withholding rules apply
• File a US tax return to claim refunds of over-withheld federal taxes
• May need to report this US income on your foreign country’s tax return
• Keep detailed records for both countries’ compliance

Your Minor Child Working Remotely for US Companies

Increasingly common scenario with digital work:

• A US employer must withhold FICA and federal income tax
• Treatment as US or foreign income depends on where the work is physically performed
• If performed abroad, it may qualify for foreign tax benefits
• Complex area requiring careful documentation

Multiple Income Sources (Common for Expat Teens)

Many expat teens have mixed income—local part-time work plus US summer jobs:

• Each income source has different withholding rules
• Must track and report all sources on the US return
• Can often use Foreign Tax Credit on foreign earnings and get refunds on US over-withholding
• Strategic planning can minimize the total tax burden

Filing Requirements for Expat Minor Children

Your child must file a US tax return if 2025 income exceeds:

• Earned income: $15,700
• Unearned income: $1,250
• Combined income: Greater of $1,250 or earned income plus $400

Key Points for Expat Families:

• Income thresholds apply regardless of where the income is earned
• Must report worldwide income (US and foreign sources)
• Filing is often beneficial even when not required to claim refunds
• US citizens abroad get an automatic extension to June 15 for filing

Smart Strategies for Expat Families with Working Teens

Document Everything

Maintain detailed records of:

• All income sources (US and foreign)
• Foreign taxes paid (for Foreign Tax Credit)
• Days worked in each country
• Currency exchange rates used

Optimize Tax Benefits

• Use the Foreign Tax Credit for foreign employment income
• Claim exempt status on US Form W-4 when appropriate
• Consider the timing of income across tax years
• Your family’s Foreign Earned Income Exclusion doesn’t affect your child’s separate tax situation

Plan for Local Compliance

Each country has different rules for:

• Minor employment taxation
• Reporting US-source income
• Family tax obligations
• Student work permits and tax treatment

Self-Employment Income: Do Minors Pay Taxes on All Income?

If your minor has freelance or business income abroad, different rules apply:

• Must pay self-employment tax (15.3%) on net earnings over $400
• This covers both the employee and employer portions of Social Security/Medicare
• Yes, minors do pay taxes on self-employment income regardless of age
• Still eligible for the standard deduction on the income tax portion
• Track all business expenses for deductions

Key Point: Even if minors are exempt from federal income tax withholding on employment, they still owe self-employment taxes on business income.

Filing Deadlines and Extensions

US citizens abroad get an automatic extension to June 15 for filing, but any taxes owed are due April 15 to avoid interest. For families behind on filings, streamlined procedures can minimize penalties.

What This Means for Your Expat Family

Most working minors in expat families end up owing little to no US taxes, but the path to that outcome varies significantly:

• Teens working locally abroad: Foreign taxes usually cover US obligations
• Teens with US summer jobs: Typically get full refunds of federal withholding
• Teens with mixed income: Strategic planning optimizes benefits from both countries
• High earners in high-tax countries often owe zero US tax after credits

The complexity comes from juggling multiple countries’ rules, different withholding systems, and varying filing requirements. However, the outcome is typically favorable for families who plan properly.

If your teen just started working abroad, help them understand local tax obligations while tracking everything for US compliance.

If your teen works summers in the US, ensure proper Form W-4 completion and expect significant federal tax refunds.

Behind on your teen’s filings? We specialize in helping expat families catch up on dependents’ returns through streamlined procedures.

If your situation involves multiple countries, the intersection of expat parent taxes and working minor children often benefits from professional coordination to ensure compliance and maximize benefits.

We’ve helped over 23,000 expats file over 71,000 returns while maintaining a 4.9-star TrustPilot average. Our team includes CPAs and Enrolled Agents living in 14 time zones, many of whom are expats themselves with working teenagers.

No matter how complex your family’s situation, you’ll have peace of mind knowing your taxes were done right. Contact us, and one of our customer champions will gladly help. If you need specific advice on your tax situation, you can also click below to get a consultation with one of our expat tax experts.

This information is for educational purposes only and should not be considered tax advice for your specific situation. Tax laws are complex and change frequently. For personalized guidance on your family’s expat tax obligations, consult with a qualified tax professional.