Do U.S. tax treaties protect me from Social Security and Medicare taxes?
No. U.S. income tax treaties cover federal income tax but do not cover Social Security and Medicare (FICA) taxes. A separate type of bilateral agreement called a Totalization Agreement governs Social Security double taxation between the U.S. and roughly 30 partner countries.
What income tax treaties do:
- Reduce or eliminate withholding on dividends, interest, royalties, and pensions
- Allocate residency tie-breaker rules
- Provide business profits and permanent establishment rules
- Require Form 8833 disclosure when overriding the Code
What totalization agreements do:
- Eliminate the double Social Security and Medicare tax for workers paying into both systems
- Exempt you from both the 12.4% Social Security and 2.9% Medicare portions of FICA when the agreement assigns coverage to the foreign country
- Allow credit for foreign contributions toward U.S. Social Security benefit eligibility
- Require a Certificate of Coverage from the exempting country’s social security agency
- Cover self-employed workers as well as employees
Countries with U.S. totalization agreements:
| Region | Examples |
|---|---|
| Europe | UK, Germany, France, Ireland, Netherlands, Spain, Italy, Sweden, Switzerland |
| Americas | Canada, Chile, Brazil, Uruguay |
| Asia-Pacific | Japan, South Korea, Australia |
Without a totalization agreement:
- You may owe 15.3% U.S. self-employment tax (12.4% Social Security + 2.9% Medicare) plus foreign social charges
- Foreign social security contributions do not qualify for the FTC and cannot offset the Medicare tax
- Some employees are exempt via the employer side of the agreement
- Self-employed expats in non-agreement countries often face the full double hit on both Social Security and Medicare
For totalization planning, see our Social Security Taxes for Expats.
Last updated on April 29, 2026
