Published 19 June 2026 · Updated 7 November 2026 · 2 min read
The income tax treaty gets the attention, but a separate agreement, in force since 1985, decides which country's social security system you pay into and lets you combine contribution records from both. For the self-employed it is the difference between paying US self-employment tax or not.
What it covers
US Social Security (retirement, survivors, disability) and Medicare hospital insurance taxes on one side; UK National Insurance contributions (Classes 1, 2 and 4) on the other. Private and occupational pensions are not covered; they belong to the income tax treaty.
The territoriality rule
You contribute where you work. Employed in the UK, you and your employer pay UK National Insurance and you are outside US Social Security on that work, wherever the employer is based and whatever currency you are paid in.
Exceptions
- Detached workers. An employee sent by a US employer to the UK for an assignment expected to last five years or less can stay in US Social Security and be exempt from UK NIC, with a certificate of coverage from the US Social Security Administration (and the reverse for UK employers sending staff to the US, with an HMRC certificate).
- Self-employed. Covered where they are resident. A US citizen self-employed in the UK pays UK Class 2 and Class 4 NIC and not US self-employment tax, evidenced by a certificate of coverage from HMRC attached to the US return.
- Government employees stay in their own country's system.
Without the certificate, the other country can still assess contributions, so obtain it at the start, not afterwards.
Combining credits for benefits
Totalising helps you qualify, not how much you receive. US Social Security needs 40 credits (roughly ten years); UK periods can be counted to reach it, and the US then pays a benefit based on US earnings only. The new UK state pension needs ten qualifying years for anything and 35 for the full amount; US periods can be counted towards the ten-year minimum. Each country pays its own proportionate benefit; you apply to each separately.
How the benefits are taxed
- US Social Security paid to a UK resident. Under the treaty's social security article it is taxable only in the UK for a non-US citizen. For a US citizen the saving clause keeps the US right to tax it (up to 85% included), with the treaty and credit sorting out the overlap.
- UK state pension. For a UK resident it is UK-taxed; for a US resident it is included in US income under the treaty's social security provisions.
Frequently asked questions
I work in the UK for a US company and pay National Insurance. Do I also owe US Social Security tax?
No, provided there is no detached-worker certificate keeping you in the US system. Your UK NIC is your contribution.
I am self-employed in London. How do I stop US self-employment tax?
Pay Class 2/4 NIC through Self Assessment, obtain a certificate of coverage from HMRC and attach it to your Form 1040 with a statement. Use the calculator to see what the US tax would otherwise be.
Does the agreement cover my SIPP or workplace pension?
No. Those are governed by the income tax treaty's pension articles.
Written by the US UK Expat Tax advisory team. Last reviewed 7 November 2026
Primary sources checked
General information, not personal tax advice. Rules and thresholds change; we confirm the position for your facts before any work.