What does Social Security Totalization Agreement mean?
Social Security Totalization Agreement is a bilateral agreement between two countries that prevents double taxation of social security benefits and contributions for workers who divide their careers between both nations. For entertainers and crew members who work internationally, these agreements ensure they only pay into one social security system at a time. The agreement also helps workers qualify for benefits by combining periods of social security contributions made in both countries. Terms like Cross-Border Tax Compliance are often associated with similar international work agreements.
Example:A producer working between the U.S. and Canada benefits from the Social Security Totalization Agreement, paying into only one system while qualifying for benefits in both countries.
Example: An actor splitting their time between the U.S. and the U.K. ensures they are covered under the Social Security Totalization Agreement, avoiding double taxation on social security contributions.
Did You Know?
The U.S. has totalization agreements with over 25 countries, simplifying social security contributions for international workers!
