Every year, thousands of skilled Indian professionals travel to the US on temporary work visas like H‑1B and L‑1. They play a major role in America’s tech sector, helping build multibillion-dollar businesses. But while they contribute heavily to the US economy, a large part of the money they pay into the US social security system is never returned to them. The reason: India and the US do not have a “totalisation agreement,” a pact that protects workers from losing their social security contributions.

What is a totalisation agreement?

A totalisation agreement is an arrangement between two countries to coordinate their social security systems. It ensures that workers either receive benefits for their contributions or don’t have to pay into a foreign system if they already contribute at home. The goal is to prevent double taxation and allow workers to combine work credits from both countries to qualify for benefits like retirement or disability.

The US has signed such agreements with over 30 countries, including Canada, the UK, Germany, Japan, and South Korea, but not India. Despite repeated talks, India has not been able to finalize a deal.

How Indian workers lose money in the US

Indian professionals on H‑1B or L‑1 visas are required to pay US payroll taxes under FICA: 6.2% for Social Security and 1.45% for Medicare, totaling 7.65% of their wages. To get US Social Security benefits, a worker must contribute for at least 40 quarters (10 years). But most Indian techies leave the US within six years, long before qualifying for any benefits. This means their contributions are lost.

The Scale of the Loss

Research from the Harvard Journal on Legislation shows that Indian workers contribute around $3 billion annually to US Social Security. Over the years, more than $25 billion has been lost to them. Between 2002 and 2012 alone, Indian workers contributed $27.6 billion, which they couldn’t reclaim.

Where does this money go?

These contributions are not kept in individual accounts. Instead, the money goes into the US Social Security Trust Funds, which are used to pay current retirees. For Indian workers who leave early, their payments essentially vanish with no benefit to them. Because there is no totalisation agreement, India has no legal way to recover this money for returning professionals.

How totalisation help other countries

In countries with totalisation agreements, workers benefit in multiple ways. For example,German workers can combine their work years in Germany and the US to qualify for social security benefits in either country. Canadians can avoid paying into US Social Security if they are already contributing to the Canadian Pension Plan. Brazil signed a totalisation agreement with the US in 2015 and has begun implementing it. However, India—despite sending the largest number of H‑1B workers to the US—still does not have such an agreement in place.

India has been asking for a totalisation pact for years. The US has been slow to agree, mainly because India’s social security system (managed by the EPFO) is structured differently and is not seen as equivalent to the US system.

Benefits to Indian workers?

Only those who stay in the US long enough, generally at least 10 years can receive Social Security payouts abroad. Most Indian tech professionals leave much earlier, so very few benefit.

Why the Pact Matters

Without a totalisation agreement, Indian tech workers are effectively subsidizing the US retirement system while receiving little or nothing in return. This is a major loss for individuals and a policy gap for India, especially as returnee professionals often face reintegration challenges.