Although the social security agreements differ according to the conditions agreed by the two signatory states, their intention is similar. The main objective of such an agreement is to abolish the double social security contributions that apply when a worker from one country works in another country and has to pay social security contributions for the two countries with the same incomes. The agreements also have a positive effect on the profitability and competitive position of companies operating abroad by reducing their business costs abroad. Companies with staff stationed abroad are encouraged to use these agreements to reduce their tax burden. Workers who are exempt from U.S. or foreign social security contributions under an agreement must document their exemption by obtaining a country coverage certificate that continues to cover it. For example, an American worker temporarily posted to the UK would need a SSA-issued coverage certificate to prove his exemption from UK social security contributions. Conversely, a UK-based employee working temporarily in the Us would need a certificate from the British authorities to prove the exemption from the US Social Security Tax. The agreements allow sSA to add U.S. and foreign coverage credits only if the worker has at least six-quarters of U.S. coverage.
Similarly, a person may need a minimum amount of coverage under the foreign system to have U.S. coverage accounted for in order to meet the conditions for granting foreign benefits. Any agreement (with the exception of the agreement with Italy) provides an exception to the territorial rule, which aims to minimize disruptions in the career of workers whose employers temporarily send abroad. Under this exception for “self-employed workers,” a person temporarily transferred to work for the same employer in another country is covered only by the country from which he or she was seconded. A U.S. citizen or resident, for example, who is temporarily transferred by a U.S. employer to work in a contract country, remains covered by the U.S. program and is exempt from host country coverage. The worker and employer only pay contributions to the U.S.
program. The agreement does not apply to independent Australian residents working in the United States. They are not subject to super warranty law in Australia, so double super coverage does not occur. In cases where there is no totalization agreement between the two countries, additional costs may be incurred by the employer. These additional costs are the same: under certain conditions, a worker may be exempt from coverage in a contracting country, even if he or she has not been transferred directly from the United States. For example, if a U.S. company sends an employee to its New York office to work for 4 years in its Hong Kong office, and then re-opens the employee for an additional 4 years in its London office, the employee may be a member of Social Security under the U.S.U.K. agreement. The rule for the self-employed applies in cases such as this, provided the worker has been seconded from the United States and is under U.S. Social Security for the entire period prior to the transfer to the contracting country. Currently, the United States has totalization agreements with the following countries: to understand the complex situation that can occur when a worker is sent to an international mission – solely on the basis of the cost of social security – consider charts 2 and 3 below, which show the social security contributions of workers and employers as a percentage of income in a number of countries of origin.