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I am a US citizen currently living in Singapore working for a Singapore subsidiary of an American company. I am on an expat package now.

I am preparing to sign a new contract directly with the Singapore subsidiary and they have just informed me they would not be paying the FICA tax. I will be on the local company's payroll. I've researched this and it looks like if the employer does not pay the FICA tax, then neither do I. I will just have a contribution gap for the period I am working in Singapore. So when it comes to drawing SS later in life (of course assuming it is even solvent), my SS may be reduced because of this gap.

Can anyone confirm that I will not have to pay any portion of the FICA tax at the end of the year or when I return to the US?

Thanks,
Scott
 

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Yup, if you're on local payroll, you don't pay US FICA and you have a gap in your FICA history.

If there is a retirement system for Singapore, you may wind up contributing to that - and if there is a social security treaty between the US and Singapore, it may be possible to count the time you worked there toward an eventual qualification for social security benefits (though your salary won't count for those years worked).
Cheers,
Bev
 
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