How Do Totalization Agreements Protect You From Double Social Security Taxation?

IRS data from 2016-2021 shows that 62% of Americans filing from abroad owe $0 in federal taxes after applying available exclusions. But income taxes aren’t the only potential double taxation issue expats face. Without proper protection, you could pay Social Security taxes to both the U.S. and your host country on the same earnings.

Totalization agreements solve this problem. These international treaties determine which country’s Social Security system you pay into, ensuring you don’t contribute twice on the same income. Even better, they help you combine work credits from multiple countries, allowing you to qualify for retirement benefits from both systems.

This guide explains how totalization agreements work for employees and self-employed expats, which countries have agreements with the U.S., and the significant changes in 2025 that eliminated penalties for expatriates receiving foreign pensions.

What Is a Totalization Agreement?

A totalization agreement (also called a Social Security agreement) is an international treaty between the U.S. and another country that coordinates Social Security coverage and benefits. These agreements serve two critical purposes:

Eliminate double Social Security taxation: Without an agreement, you could be required to pay Social Security taxes to both countries on the same earnings. Totalization agreements establish clear rules about which country’s system you contribute to based on factors like your employer’s location, assignment length, and employment type.
Combine work credits for benefit eligibility: If you’ve worked in multiple countries but haven’t accumulated enough credits in any single country to qualify for retirement benefits, totalization agreements allow both countries to count your combined work history. This helps you meet minimum eligibility requirements and receive proportional benefits from each system.

What totalization agreements are not: These agreements don’t cover income taxes. That’s what tax treaties handle. Totalization agreements specifically address Social Security and Medicare contributions (FICA taxes for employees, self-employment tax for freelancers and business owners). They also don’t affect your ability to use the Foreign Earned Income Exclusion or Foreign Tax Credit for income tax purposes.

The U.S. has had totalization agreements since the late 1970s, creating a network of bilateral treaties that protect workers who divide their careers between countries.

See If a Totalization Agreement Applies to You.

You can confirm whether you’re protected from paying Social Security taxes twice.

Which Countries Have Totalization Agreements With the U.S.?

As of 2026, the United States has active totalization agreements with 30 countries:

Australia, Austria, Belgium, Brazil, Canada, Chile, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Luxembourg, Netherlands, Norway, Poland, Portugal, Slovak Republic, Slovenia, South Korea, Spain, Sweden, Switzerland, United Kingdom, Uruguay

Significant gaps: Many popular expat destinations do not have totalization agreements with the U.S., including:

Singapore
Hong Kong
United Arab Emirates (Dubai, Abu Dhabi)
Mexico
Costa Rica
Panama
Thailand
Malaysia
Philippines
India
China (except for limited provisions)
Vietnam
Colombia
Argentina

If you work in a country without a totalization agreement, you may be required to pay Social Security taxes to both countries on the same income. Self-employed expats and digital nomads face particular challenges in these locations.

Pro Tip

Even if your country doesn’t have a tax treaty with the U.S., check for a totalization agreement. These are separate treaties, and your country might have one without the other. For instance, Brazil has a totalization agreement but no comprehensive income tax treaty with the U.S.

How Do Totalization Agreements Work for Employees?

Most U.S. totalization agreements follow a familiar pattern called the “detached worker rule” that determines which country’s Social Security system covers you:

Temporary assignments (under 5 years):

If a U.S. employer sends you to work in an agreement country for five years or less, you continue paying into the U.S. Social Security system. You’re exempt from the foreign country’s Social Security taxes. Both you and your employer pay the standard 7.65% FICA tax (6.2% Social Security + 1.45% Medicare) on your wages.

Long-term assignments (over 5 years):

If you’re assigned to work in an agreement country for more than five years, or if you’re hired directly by a foreign employer, you generally pay only into the host country’s Social Security system. You’re exempt from U.S. Social Security taxes.

Important exception: The U.S.-Italy agreement doesn’t include the five-year detached worker provision. Each agreement has unique terms, so always verify the specific rules for your country.

Example: Sarah’s German assignment

Sarah works for a U.S. tech company that sends her to Germany for a three-year project. Under the U.S.-Germany totalization agreement, she continues to pay U.S. Social Security taxes (her employer and she each pay 7.65%). She receives a Certificate of Coverage from the U.S. Social Security Administration, showing that she’s exempt from German Social Security contributions.

Three years later, Sarah’s assignment is extended to a total of seven years. Because she’ll now exceed five years, the agreement shifts coverage to Germany starting in year six. From that point forward, she pays into the German system and stops paying U.S. Social Security taxes.

Certificate of Coverage requirement: To claim exemption from one country’s Social Security taxes under a totalization agreement, you must obtain a Certificate of Coverage from the country where you are paying. This certificate confirms to the tax authorities of the other country that you’re already covered. Without this document, both countries may require you to pay.

How Do Totalization Agreements Work for Self-Employed Expats?

Self-employed Americans abroad face unique challenges with Social Security. The rules differ significantly from those for employees.

General rule for self-employed expats: Under most totalization agreements, self-employed individuals are covered by the Social Security system of the country where they reside, rather than the country where their clients are located or where their business is registered.

Why this matters: Self-employment tax is 15.3% (12.4% Social Security + 2.9% Medicare) on net self-employment income, because you pay both the employer and employee portions. Without a totalization agreement, you could owe this 15.3% to the U.S., plus contributions to your host country’s system on the same income.

Example: James’s freelance work in Portugal

James, a freelance web developer, moves to Portugal and becomes a Portuguese tax resident. Under the U.S.-Portugal totalization agreement, because he resides in Portugal, he contributes to the Portuguese Social Security system and is exempt from U.S. self-employment tax on his freelance income.

To claim this exemption, James obtains a Certificate of Coverage from Portugal’s Social Security authorities, which shows that he’s paying into their system. He keeps this certificate and provides it if the IRS ever questions why he’s not paying U.S. self-employment tax.

Countries without agreements: If you’re self-employed in Singapore, Hong Kong, Mexico, or another country without a totalization agreement, you’ll generally pay 15.3% U.S. self-employment tax on your worldwide net earnings plus whatever your host country requires. There’s no relief from double taxation in these situations. For strategies on managing taxes while working abroad in these countries, consider consulting with an expat tax specialist.

Retirement planning for expats requires strategic Social Security coordination. If you’re approaching retirement age or already receiving benefits while living abroad, our team help s retirees navigate complex international Social Security rules, including totalization agreements, foreign pension taxation, and optimizing benefits from multiple countries. We’ve helped thousands of American retirees living overseas maximize their retirement income while staying fully compliant with U.S. tax obligations.

How Do I Get a Certificate of Coverage?

A Certificate of Coverage is the official document proving you’re paying into one country’s Social Security system and, therefore, exempt from the other country’s Social Security taxes under a totalization agreement.

To get a U.S. Certificate of Coverage:

If you’re covered under the U.S. system (typically because you’re on a temporary assignment under five years), your employer or you (if self-employed) requests the certificate from:

Social Security Administration
Office of International Programs
P.O. Box 17741
Baltimore, MD 21235-7741

You can also request certificates through the Social Security Administration’s international programs website.

To get a foreign Certificate of Coverage:

Contact the Social Security agency in the agreement country where you’re working and paying Social Security contributions. Each country has its own process, but you’ll typically need to provide:

Proof of employment or self-employment in that country
Evidence that you’re paying into their Social Security system
Your passport or national identification
Completed application forms specific to that country

Pro Tip

Request your Certificate of Coverage as soon as you start your foreign assignment or self-employment. Don’t wait until tax time. Processing can take several weeks, and without the certificate, you could face withholding from both countries while you wait for the paperwork.

How Can I Combine Work Credits From Multiple Countries?

One of the most valuable aspects of totalization agreements is the ability to combine work credits from multiple countries to meet minimum eligibility requirements for retirement benefits.

How credit combining works:

Each country maintains its own minimum requirements for eligibility for benefits. In the U.S., you need 40 quarters of coverage (equivalent to 10 years of work) to qualify for retirement benefits. Other countries have similar minimums.

Under a totalization agreement, if you don’t have enough credits in one country to qualify for benefits, that country can count your credits from the other country to help you meet the minimum threshold.

Example: Michael’s split career

Michael worked in the U.S. for eight years, earning 32 Social Security quarters (short of the 40 required). He then moved to the UK and worked there for 12 years before retiring.

Without the U.S.-UK totalization agreement:

U.S. benefits: $0 (doesn’t meet 40-quarter minimum)
UK benefits: Full UK pension based on 12 years

With the U.S.-UK totalization agreement:

U.S. benefits: Partial U.S. Social Security based on his 8 years of U.S. work (the UK credits helped him meet the minimum threshold, but his benefit is proportional to his U.S. work only)
UK benefits: Full UK pension based on 12 years (the U.S. credits helped ensure eligibility if needed)

Critical point: Your credits aren’t transferred or reduced. When the U.S. counts your foreign credits to determine eligibility, it’s simply recognizing your work history abroad. Your foreign credits remain intact for foreign benefit calculations, and your U.S. credits remain intact for U.S. benefits.

Proportional benefits: Even though countries combine credits for eligibility purposes, your actual benefit amount is proportional to the time you worked in each country. If you worked 8 years in the U.S. and 12 years in the UK, your U.S. benefit reflects only the 8 U.S. years, not the whole 20-year career.

Planning your retirement abroad involves strategically coordinating benefits from multiple countries. Our expat tax team specializes in helping retirees maximize Social Security and foreign pension benefits while minimizing worldwide tax liability. We help you time benefit claims, navigate treaty provisions, and ensure you receive everything you’ve earned from both systems.

What’s the Difference Between Totalization Agreements and Tax Treaties?

Totalization agreements and tax treaties are both designed to prevent double taxation, but they cover completely different types of taxes:

Totalization Agreements:

Cover Social Security and Medicare taxes (FICA/SECA)
Determine which country you pay Social Security contributions to
Help combine work credits for benefit eligibility
Address payroll taxes, not income taxes

Tax Treaties:

Cover income taxes (wages, dividends, interest, pensions, capital gains)
Determine which country has the right to tax specific types of income
Provide reduced withholding rates and tax credits
Address income taxes, not Social Security contributions

Why both matter: Many expats need both. A tax treaty may eliminate double taxation on your salary, while a totalization agreement prevents double taxation of Social Security on that same salary. They work together but serve different purposes.

Example: The U.S. has both a tax treaty and a totalization agreement with Germany. The tax treaty addresses income tax on your wages, dividends, and other income. The totalization agreement addresses which country you pay Social Security taxes to. You need to consider both when planning your expat tax strategy.

For comprehensive information on how U.S. expats can avoid double taxation on income, including using the Foreign Tax Credit and Foreign Earned Income Exclusion, see our complete guide to expat tax planning.

What Changed in 2025?

Major update: Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) Repealed

In January 2025, the Social Security Fairness Act eliminated two provisions that had reduced Social Security benefits for Americans receiving foreign pensions:

Windfall Elimination Provision (WEP): Previously reduced U.S. Social Security benefits for people who received pensions from employment not covered by U.S. Social Security (including many foreign pensions). This often results in a reduction of benefits by several hundred dollars per month.
Government Pension Offset (GPO): Previously reduced Social Security spousal or survivor benefits by two-thirds of any foreign government pension amount.

What this means for expats: If you worked in a country with a totalization agreement and built up both U.S. Social Security credits and foreign pension benefits, you previously faced significant reductions in your U.S. Social Security payments due to WEP. As of January 2025, these reductions are eliminated.

Retroactive relief: The repeal is effective retroactively as of January 2024. If you were receiving reduced benefits in 2024 due to WEP or GPO, you should receive lump-sum payments to make up the difference.

Example: Linda’s restored benefits

Linda worked 15 years in the U.S. (earning 60 Social Security quarters) and 20 years in Canada, where she earned a Canadian pension. Before January 2025, WEP reduced her monthly U.S. Social Security benefit from $1,800 to $1,250. After the WEP repeal, her full $1,800 monthly benefit was restored, plus she received a lump-sum payment covering the 2024 reductions.

For complete details on how the Social Security Fairness Act affects expats, see our comprehensive guide to the WEP and GPO repeal.

Pro Tip

If you were affected by WEP or GPO, contact the Social Security Administration to verify your benefit adjustment and confirm any retroactive payments you’re owed. Don’t assume the change will be applied automatically.

Get Expert Help With Totalization Agreements

Totalization agreements can prevent thousands of dollars in double Social Security taxation and help you qualify for retirement benefits from multiple countries. But navigating the specific rules for your situation requires expertise in both U.S. and foreign Social Security systems.

At Greenback Expat Tax Services, we’ve helped over 23,000 expats across 190+ countries optimize their Social Security strategies and stay compliant with complex international tax rules. Whether you’re planning a move abroad, already working overseas, or approaching retirement with work credits in multiple countries, our team of CPAs and Enrolled Agents can help you make strategic decisions that protect your retirement security.

If you’re ready to be matched with a Greenback accountant, click the “Get Started” button below. For general questions about totalization agreements or how they affect your specific tax situation, contact our Customer Champions.

Get Help Applying the Right Totalization Rules.

You can ensure your Social Security taxes are reported correctly and efficiently.

This article is provided for informational purposes. Every expat’s situation is unique, and totalization agreement rules vary by country and type of employment. Always consult with a tax professional familiar with international Social Security coordination before making decisions that could affect your retirement benefits.

Free Guide 15 Tax Tips Every American Expat Needs To Know in 2025

"*" indicates required fields

Comments

This field is for validation purposes and should be left unchanged.