Who Is Exempt From Social Security Taxes?

The vast majority of American employees pay into the Social Security system through payroll taxes. These taxes provide retirement and disability income, as well as death and survivorship benefits. Still, not every worker is required to pay them. Knowing who is exempt from Social Security taxes can shed some light on what not paying them can mean for your future retirement.

A financial advisor can help you manage your retirement savings and Social Security payments.

How Much Are Social Security Taxes?

Currently, the Social Security tax is 6.2% for employees in 2025, which is paid through payroll withholding. For Medicare, the employee portion of the tax is a combined 1.45%. Individuals earning more than $200,000 and married couples filing jointly making over $250,000 pay an additional 0.9% in Medicare taxes.

So together, the Social Security and Medicare programs make up the Federal Insurance Contributions Act (FICA) tax rate of 7.65%. Remember, though, that both employers and employees pay this tax, meaning its total adds up to 15.3%. On the other hand, self-employed workers have to cover the entire 15.3% FICA tax themselves.

Five Groups Exempt From Social Security Taxes

Nearly every American worker – as well as their employer – is required to pay Social Security and Medicare taxes, including the self-employed. If you don’t pay into the system when you work, then you can’t collect the income benefits later in life. And based on the average retirement savings for Americans, Social Security may be a significant part of their income. However, there are certain groups of taxpayers for which Social Security taxes do not apply, including:

1. Religious Organizations

Members of some religious groups can be exempt from paying into Social Security under certain circumstances. For starters, they must belong to a recognized religious sect that is conscientiously opposed to accepting healthcare or retirement benefits under a private plan.

In addition, these organizations must have an established record, going back to 1950, of providing their members with reasonable provisions for food, shelter, and medical care. Qualifying religious sects include Mennonites and the Amish.

2. Students and Young Workers

Currently, enrolled students who work at their university can be exempt from Social Security taxes. The exemption, though, only covers income earned from that job; any earnings from a second job off-campus will be subject to all taxes. The student exemption covers medical residents, as well. The exception to the exemption? University employees, even those who later enroll at the college where they work.

Children under 18 who work for their parents in a family-owned business also do not have to pay Social Security taxes. Likewise, people under 21 who work as housekeepers, babysitters, gardeners or perform similar domestic work are exempt from this tax.

3. Employees of Foreign Governments and Nonresident Aliens

A young woman reviews who is exempt from Social Security taxes.

People living in the U.S. who aren’t citizens or legal residents are classified as nonresident aliens. Most of this group is required to pay into Social Security, even if they work in the U.S. for a foreign company.

The exceptions include foreigners here on temporary visas, such as professional educators and scholars, and certain classes of international students who choose to work while in the U.S.

Those employed by foreign governments are also exempt from Social Security taxes as long as their role includes conducting official business on that government’s behalf. However, that person’s family and domestic helpers, like nannies, would be required to pay Social Security taxes (unless they also work for the same foreign government).

4. Workers in the Public Sector

When the Social Security program began, local and state employees were usually already paying in to government pension plans, so they weren’t taxed again for Social Security.

These days, most public employees have Social Security coverage — and thus pay into the system out of their paychecks — but there are still a few exceptions. These include public workers who participate in a government pension plan comparable to Social Security.

In addition, federal workers, including members of Congress, who have been serving consistently since before 1984 are covered under another retirement plan, so they’re also exempt from Social Security taxes.

5. High-Income Earners

High-income employees are not technically exempt from Social Security taxes, but part of their income is. In 2025, every dollar of taxable income someone makes above $176,100 (up from $168,600 in 2024) will effectively be exempt from Social Security taxes.

For example, someone making a taxable income of $300,000 in 2025 will pay Social Security taxes on 6.2% of just $176,100, which comes out to $10,918.20. Their employer then pays that same amount in matching Social Security taxes. This means a person who makes exactly $176,100 pays the very same amount in Social Security taxes as someone who earns much more.

How Exemptions Affect Future Benefits

Workers earn Social Security credits based on covered employment. People who qualify for an exemption do not earn credits during those periods. This can affect whether they reach the minimum number of credits needed for retirement, disability or survivor benefits. Gaps in covered employment may also influence the final benefit calculation, since benefits are based on a worker’s highest earning years in covered work.

Individuals with long exempt periods often rely on other retirement plans. Some public employees and members of certain religious groups fall into this category. These plans may operate under separate rules for vesting, benefit formulas and survivor provisions.

Foreign workers with exempt status may still qualify for benefits under a totalization agreement. These agreements coordinate benefit eligibility between the U.S. and certain countries. Workers covered under such agreements can combine periods of coverage, subject to each country’s rules.

People who move in and out of exempt employment may need to review how these breaks interact with their long-term retirement strategies. Earnings in covered jobs still count toward credits and future benefit calculations, but exempt years do not.

Bottom Line

If you have the option to take an exemption from Social Security, consider the short- and long-term implications, especially when it comes to retirement.

Although not paying into the Social Security program can increase your take-home pay, it can also lead to less supplemental income in retirement. If you have the option to take an exemption from Social Security, make sure you consider the short- and long-term implications of not doing so, especially when it comes to navigating your post-working life. As always though, it’s important to plan ahead for your retirement expenses and income. Working with a financial advisor can help you make informed decisions about what to do with your money.

Tips for Being Retirement Ready

Consider working with a financial advisor to make sure you’re ready to retire when you want to. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
The total value you get in Social Security benefits is directly correlated to the age you begin withdrawing money. Start too early, and you may end up reducing your payouts by tens of thousands of dollars.