As a precautionary measure, it should be noted that the derogation is relatively rare and is invoked only in mandatory cases. There are no plans to give workers or employers the freedom to regularly choose coverage that contradicts normal contractual rules. Applications should include the name and address of the employer in the United States and the other country, the full name, place and date of birth of the worker, nationality, U.S. and foreign Social Security numbers, location and date of employment, and the start and end date of the assignment abroad. (If the employee works for a foreign subsidiary of the U.S. company, the application should also indicate whether U.S. Social Security Insurance has been agreed upon for employees of the related company pursuant to Section 3121 (l) of the internal income code.) Self-employed workers should indicate their country of residence and the nature of their self-employment. When applying for certificates as part of the agreement with France, the employer (or non-employee) must also certify that the worker and all accompanying family members are covered by health insurance. 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. The Social Security Agreement between the United States and Mexico was signed on June 29, 2004. The agreement must be submitted to the U.S. Congress and the Mexican Senate for consideration, so the agreement is not currently in effect (December 2014). The agreements cover a period of two to five years depending on the host country and require at least one valid contribution in Canada to allow a person to receive benefits in Canada. 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. Most U.S. agreements eliminate dual coverage of autonomy by allocating coverage to the worker`s country of residence. For example, under the US-Swedish agreement, an American citizen living in Sweden and living in Sweden is covered only by the Swedish system and is excluded from US coverage. Social security rates and caps (or ceilings) vary from country to country.
The graph includes contribution amounts for employees and employers, percentage amounts of gross salary and marginal social security rate for a number of gross wages.