Which Social Security and Medicare figures matter for your calculation?

For 2026, the published self-employment tax rate is 15.3%, comprising 12.4% Social Security and 2.9% Medicare. The Social Security contribution and benefit base is $184,500, while Medicare has no earnings cap. Additional Medicare Tax can also apply depending on filing status and income, so the combined rate alone does not complete your calculation.

Does moving to the UAE provide relief under a totalization agreement?

The UAE is absent from the SSA agreement list described as of October 2026. That absence does not settle your local UAE contribution obligations, which need separate assessment. Identify the US coverage position and the UAE requirements alongside each other before treating a foreign business address as relief from social-insurance charges.

Which agency should issue your certificate of coverage?

The issuing agency depends on which system covers your work. To establish exemption from the foreign system while paying only US self-employment tax under an agreement, SSA directs you to its Office of Earnings and International Operations. For exemption from US Social Security and Medicare, the IRS requires the relevant home-country agency’s Certificate of Coverage.

Self-Employment Tax Abroad: Totalization Agreements and When You Still Pay Social Security. FNC

In short

If you are a self-employed US citizen or resident abroad, US self-employment tax generally applies when net earnings reach at least $400, even if you qualify for the FEIE. Your income-tax relief and social-insurance coverage need separate calculations. A totalization agreement may affect coverage depending on your country and work arrangement, so have your CPA assess the applicable rules and obtain the appropriate coverage evidence before relying on an exemption.

You can exclude foreign earned income and still owe US self-employment tax on it. If you work for yourself abroad, an income-tax calculation alone can leave a substantial part of your position unexplained. ¹

This is general information. Your CPA and counsel confirm the details for your case.

The starting point remains citizenship-based taxation. Publication 54 revised in December 2025 says your worldwide income is generally subject to US income tax wherever you live. Social Security coverage and possible relief under an agreement require another set of questions alongside that return. ¹

When self-employment tax remains on the list

The IRS says a self-employed US citizen or resident generally must pay self-employment tax when net earnings from self-employment are at least $400. The basic rules are generally the same whether you live in the US or abroad. Don't remove the calculation from your checklist because your customers or bank accounts are overseas. ¹

For 2026, the published rate is 15.3%, comprising 12.4% Social Security and 2.9% Medicare. Identify the earnings included, then apply the relevant limits and any additional tax. Multiplying one earnings figure by the combined rate doesn't complete every case. ²

Publication 54's example uses a consultant abroad with $68,000 in net profit. It says the consultant owes self-employment tax on that $68,000 despite qualifying for the FEIE. This is the IRS's example, not a projection for your business, but it demonstrates why you should keep the two calculations separate. ¹

Use the correct year's Social Security limit

For 2026, the Social Security Administration gives a contribution and benefit base of $184,500, with a 12.4% OASDI rate for self-employment income. Medicare has no earnings cap. Use the SSA's 2026 figure in your planning rather than carrying forward an older year's contribution base. ³

The IRS also lists a 0.9% Additional Medicare Tax above $200,000 for single or head-of-household filers, $250,000 for married filing jointly, and $125,000 for married filing separately. Have your CPA assess the applicable status and calculation. A rate copied without its threshold and year is an incomplete planning note. ²

What a totalization agreement can change

SSA explains that US Social Security coverage extends to self-employed US citizens and residents working in the US or another country. Some international agreements assign self-employment coverage to the country of residence. That gives you a country-specific question to investigate rather than a general exemption created by going abroad. ⁴

As of October 2026, the SSA agreement list includes countries such as Germany, the United Kingdom, Portugal and Canada. It also includes Romania, whose agreement entered into force on September 1, 2026. The United Arab Emirates is not on that list. Don't infer an agreement from a country's popularity as a business destination. ⁴

A move to the UAE also needs a separate local coverage assessment. Confirm your UAE obligations before treating the absence of a US agreement as an answer about local contributions. Put the US and UAE positions side by side, with responsibility for each calculation assigned.

Coverage depends on the work arrangement

An employee transferred by an employer isn't the same fact pattern as someone working for themselves. SSA says the detached-worker rule generally keeps temporarily transferred employees in the home country's system for assignments expected to last five years or less, except under the Italy agreement. Don't apply that employee rule to your freelance business without review. ⁴

Documentation also matters. To establish exemption from the foreign system while paying only US self-employment tax under an agreement, SSA directs you to request a certificate of coverage from its Office of Earnings and International Operations. The IRS says someone claiming exemption from US Social Security and Medicare under an agreement must obtain the relevant home-country agency's Certificate of Coverage. ^{1, 5}

Ask which country is providing the coverage in your case and which agency must issue the evidence. Keeping the direction of the exemption clear helps you avoid requesting a document for a different situation from your own.

What this means for you

Your income-tax result and social-insurance position need separate calculations. Establish whether a totalization agreement covers your work and what evidence is required. You can then compare business structures without treating an income-tax exclusion as relief from every charge.

What to do this month

Gather your self-employment earnings and contribution records for each relevant country. Keep them separate from the figures used to evaluate the FEIE.
Confirm whether an agreement covers your destination and your work arrangement. Identify whether you are reviewing self-employment or a temporary employee assignment.
Identify which country's system should cover the work and which agency must issue the certificate. Request the correct evidence before relying on an exemption.
Update the planning calculation with the 2026 Social Security base. Review the local contribution position separately, including any country without a US agreement.

Common mistakes to avoid

Assuming the FEIE removes self-employment tax.
Using an old Social Security contribution base for a new tax year.
Assuming every destination has a US totalization agreement.
Treating a rule for transferred employees as a rule for all self-employed people.

The FNC angle

Before changing your residency or business arrangement, make the work and coverage assumptions explicit. FNC's structuring discussion should use the same facts your CPA is assessing: who performs the work, where and under what arrangement. The aim is to understand the obligations alongside the practical benefits you want from the move, without selling a foreign address as an exemption.

General information only, not personal tax, legal or investment advice. Rules depend on your circumstances and the applicable year. No outcome is guaranteed.

Self-Employment Tax Abroad: Totalization Agreements and When You Still Pay Social Security