Do H-1Bs Pay Social Security Taxes?

Date: Tuesday, April 30, 2002 3:13 PM

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The answer to that question depends on several things. Assuming that the
company that the H-1B works for is honest then they have to pay SS taxes
unless they are exempted by a Totalisation agreement. To understand what
Totalisation is please go to this link:
http://www.zazona.com/ShameH1B/H1BFAQs.htm#DoWorkersPayFICA. (Note: some
people spell it Totalization)

The H-1B has to make a decision whether he/she will get a Green Card or
not.
If they opt for a Green Card it may be wise for them to pay SS taxes so
that
they are eligible for benefits after 10 years of paying into the system.
They can only opt for Totalisation if they come from a country that has
an
agreement with the US.

The National Association of Software and Service companies (NASSCOM) and
the
Immigrant Support Network (ISN) are stepping up their efforts to help
the
Government of India to get Totalisation Agreements with the US and UK.
These
agreements, if passed, would allow H-1Bs from India to avoid paying
Social
Security taxes.

Currently the United States has Totalisation agreements with 18
countries
that allow H-1Bs to be exempted from Social Security by using
Totalisation
agreements. These countries include Austria, Belgium, Canada, Finland,
France, Germany, Greece, Ireland, Italy, Korea (South), Luxembourg, the
Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United
Kingdom. Chile will soon have one. Of course if an Indian, as an
example,
immigrates to the UK or Canada and then gets their H-1B they may be
eligible
for an exemption.

Many H-1Bs are saying that the US Social security laws reek of
discrimination, especially since the largest contingent of H-1B visa
workers
in the United States are from India and China. Their complaint does have
some merit because they are being treated differently. The reason for
this
duality is because the countries that we have agreements with have
programs
that are roughly equivalent to ours, therefore their Totalisation
payment is
as much or more than what they would pay for FICA.

India, China, Pakistan, Mexico, and many other countries have nothing
comparable to our SS system. That means that the H-1B would pay no taxes
at
all. That's a very good situation for the H-1Bs and the companies that
want
to hire them. It also gives companies another very good reason to hire
them
over American workers.

http://www.rediff.com/news/2001/apr/17us2.htm
Taxes, but No Social Security for Indian H1-B Visa Holders

http://www.financialexpress.com/fe20011004/efetop1.html
Taxing times: Nasscom pitches for totalisation deal with US, UK

http://www.isn.org/news/20010726140803.html
ISN Lobby campaign

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