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Posted to the US? Why you pay both FICA and Indian PF, with no relief

Your Indian employer is sending you to the US on an H-1B or L-1, and you are about to pay US Social Security on top of the Indian provident fund you already pay.

You work for an Indian employer that is deputing you to the US, and US payroll is about to start deducting FICA, the US Social Security and Medicare tax. You already contribute to Indian provident fund, so the same salary funds two social-security systems at once, for an assignment that is temporary and will almost certainly never earn you a US benefit. You have heard that a social security agreement and a Certificate of Coverage can switch one of them off, the way they do for postings to the UK or Germany. The hard fact is that there is no such agreement between India and the US, so that relief does not exist for this corridor.
Last reviewed: 4 August 20267 min readReviewed by Preetesh Maloo, CA

The short answer

There is no social security agreement between India and the United States, so an Indian employee posted to the US pays US FICA and, if kept on Indian payroll, Indian provident fund at the same time, and there is no Certificate of Coverage to stop it. FICA is 7.65% of pay from the employee (6.2% Social Security plus 1.45% Medicare) and the employer matches it. The one exemption, for F-1, J-1, M-1 and Q-1 students and scholars who are still nonresident aliens, does not cover H-1B or L-1 workers, who are liable from their first day. Worse, that FICA is usually gone for good: a US retirement benefit needs 40 credits, about ten years, and a short deputation never reaches it and gets no refund on the way out.

References on this page

  • No India-US Social Security Agreement in force: the US has totalization agreements with about 30 countries, India is not one (ssa.gov, International Programs)
  • US FICA 2026: Social Security 6.2% employee plus 6.2% employer on wages up to 184,500 dollars; Medicare 1.45% each, no wage cap (IRS Topic 751; SSA)
  • Additional Medicare 0.9% on an individual's wages over 200,000 dollars (IRS)
  • IRC Section 3121(b)(19): F-1, J-1, M-1, Q-1 students and scholars exempt from FICA while nonresident aliens; H-1B liable from the first day of US employment (IRS)
  • US Social Security retirement needs 40 credits, about ten years; a short deputation earns no benefit and correctly-withheld FICA is not refunded on departure (SSA)

The short answer: there is no India-US social security agreement

India and the United States have no social security agreement, and there is no India-US totalization agreement in force. The US has these agreements with about 30 countries, and India is not one of them. India has been asking for one for years, but as of 2026 nothing has been signed.

That single fact decides everything on this page. Because no agreement exists, there is no detached-worker relief and no Certificate of Coverage for this corridor. You cannot get a document that switches off the US charge, the way an Indian posted to the UK now can under the India-UK Double Contributions Convention, or an Indian posted to Germany can under that totalization agreement. For a US posting, both systems simply apply. For how the Certificate of Coverage route works for the countries that do have an agreement, see the Certificate of Coverage page.

What you actually pay: FICA on top of PF

FICA is the US Social Security and Medicare tax, and it comes out of the US payroll on your US wages. The employee share is 7.65% of pay, and your employer pays the same again.

FICA componentEmployeeEmployer
Social Security6.2%6.2%
Medicare1.45%1.45%
Total7.65%7.65%

Social Security is charged only up to a wage cap, 184,500 dollars for 2026, so pay above that escapes the 6.2%. Medicare has no cap, and an extra 0.9% Additional Medicare applies to wages over 200,000 dollars. A self-employed person pays both halves, 15.3%.

At the same time, if you stay on the Indian payroll for the deputation, your Indian provident fund contributions carry on. So one salary funds two retirement systems in parallel, US Social Security you will likely never draw from, and Indian PF you will. Nothing in US or Indian law stops this for a country pair with no agreement.

The one exemption, and why H-1B does not get it

There is a FICA exemption, but it is tied to specific student and scholar visas, not to work visas. Foreign nationals in F-1, J-1, M-1 or Q-1 status who are still nonresident aliens are exempt from Social Security and Medicare tax on their wages under the Internal Revenue Code (Section 3121(b)(19)). For students that lasts while they remain nonresident aliens, broadly their first five calendar years.

H-1B and L-1 do not qualify. The IRS is explicit that H-1B holders are liable for Social Security and Medicare tax from the very first day of US employment, whether they are nonresident or resident aliens, unless a totalization agreement relieves them. There is no such agreement for India, so an H-1B or L-1 worker deputed from India pays FICA in full from day one. The student exemption is why a plan to enter on F-1 and later switch to H-1B changes your FICA position the moment the H-1B work starts.

Why the FICA you pay is usually gone for good

The money is not just an extra charge, it is one you will almost never see again. A US Social Security retirement benefit needs 40 credits, which is about ten years of covered US work, and you can earn at most four credits a year. A two or three-year deputation earns roughly eight to twelve credits, nowhere near the forty, so it builds no US benefit at all.

And unlike a few countries that refund a departing worker's contributions, the US refunds nothing that was correctly withheld. FICA taken from an H-1B or L-1 worker was correctly withheld, so leaving the US does not get it back. A refund exists only where FICA was withheld in error, for example from an exempt F-1 student, and that is claimed from the employer or through the IRS, not by anyone who genuinely owed it. A totalization agreement, if one existed, would fix this in one of two ways, by letting you skip the US charge on a Certificate of Coverage, or by counting your Indian and US periods together so short stays still qualify. Neither route is open for India.

A worked example: an H-1B engineer in New Jersey

Meera is a software engineer whose Indian employer deputes her to New Jersey for three years on an H-1B, on a salary of 130,000 dollars. She stays on the Indian payroll, so her provident fund contributions continue at home.

Her US wages attract FICA in full. Social Security at 6.2% is 8,060 dollars a year, and Medicare at 1.45% is 1,885 dollars, so 9,945 dollars a year comes out of her pay, and her employer pays another 9,945. Over the three years that is about 29,835 dollars of her own money into US Social Security and Medicare. She earns roughly twelve credits, far short of the forty she would need, so she will draw no US retirement benefit for it, and none of it is refunded when she moves home. There is no Certificate of Coverage to obtain, because India and the US have no agreement, so the only honest planning is on the Indian PF and tax side, not on the US charge itself.

This is social security, not income tax

Keep FICA separate from income tax, because different rules decide them. FICA is a social-security charge on your US wages. Where your salary is taxed as income, and whether the same salary is taxed in both India and the US, is a different question, settled by your residential status and the India-US tax treaty, not by FICA.

A US deputation often raises that income-tax double charge too, on top of the FICA problem. That one does have a fix, a foreign tax credit on your Indian return, and the onsite deputation double-tax page covers it. FICA itself gets no foreign tax credit in India, so it is a real cost, not something a credit unwinds.

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What's involved

What the CA actually does

  1. 1

    We tell you straight that there is no relief

    The first thing people want is a Certificate of Coverage. We confirm the hard fact for this corridor: India and the US have no social security agreement, so no certificate can be issued and the US FICA cannot be switched off. You will not be left chasing relief that does not exist.

  2. 2

    We handle your Indian PF and residential status

    We work out whether your Indian provident fund should continue during the deputation and what that means, and we settle your Indian residential status for the year of the move, which drives what you file in India.

  3. 3

    We line up the income-tax side, which is separate

    The FICA charge is one thing; whether your salary is taxed twice as income is another. We handle the Indian income-tax position, your residence, any split year, the treaty and a foreign tax credit, so the income-tax double charge is dealt with even though the FICA one cannot be.

  4. 4

    We coordinate cleanly with your US CPA

    The US payroll, the FICA and the US return are your US CPA's work. We prepare the India side so the two fit together, rather than each being fixed in isolation.

What to have ready

Documents you'll typically need

  • Your deputation or assignment letter with its start and expected end dates
  • Your US visa (H-1B, L-1 or other) and passport
  • Your US pay stubs showing the FICA withheld
  • Proof of whether Indian provident-fund contributions continue during the posting
  • Employer details in both India and the US

Frequently asked questions

Common questions

Posted to the US and paying FICA on top of PF?

Tell us your deputation dates and visa. A practising CA will sort your Indian PF and tax side, and coordinate with your US CPA, on a free call, no obligation.

No card, no obligation. All certification and filing work is handled by ICAI-registered practising Chartered Accountants.