Social Tax Obligations for US Expats

 How to Know Your US Social Security and Medicare Tax Contributions as an Expat?

If you work for a US based company on a foreign assignment or a US affiliated company, you will be subject to US Social Security and Medicare tax contributions.  Your employer should be handling the withholding and remittance of these taxes.  Withholdings will be reported on a Form W-2.

If you are subject to both the foreign country social tax program and US Social Security / Medicare tax program, you can avoid duplicate social tax payments if you are living and working in a country that has a bilateral Totalization Agreement with the US.  You achieve this by filing a Certificate of Coverage.

If you meet the foreign tax home requirements and work for a foreign owned and operated company with no US affiliation, it is likely that you will not owe US Social Security of Medicare tax on your foreign earnings.  However, you may owe contributions to the foreign country’s social tax program as well as foreign income tax

If you have foreign earned self-employment income, you will be subject to the Self Employment tax which includes 12.4% tax for Social Security and 2.9% for Medicare.  These taxes are calculated on your net profit (self-employment income less business related expenses).   However, self-employed individuals would be exempt from US self-employment tax if they are subject to social tax in the host country and the host country has a Totalization Agreement with the US.  Schedule SE (self-employment) would be included in the US tax return with a statement of exemption from US self-employment tax due to Totalization Agreement.