What are totalization agreements and how do they affect my Social Security and Medicare tax?

A totalization agreement is a treaty between the U.S. and another country that prevents you from paying Social Security taxes to both systems on the same earnings and lets work credits combine toward benefits. The U.S. has these with many countries (though not with India, which is a frequent surprise for Indian nationals). Without an agreement, your U.S. wages are generally subject to the 6.2% Social Security and 1.45% Medicare payroll taxes regardless of nationality, even if you don't expect to claim benefits. Where an agreement exists, a worker on a short foreign assignment can stay covered only by their home system using a certificate of coverage. These agreements also help you avoid losing partial-career credits in either country. Check whether your home country has a totalization agreement, because it directly affects roughly 7.65% of your paycheck.