Under U.S. law, self-employed U.S. citizens or U.S. lawful permanent residents (green
card holders) pay taxes to and have coverage under the U.S. Social Security program
on their worldwide income. Australia's Superannuation Guarantee (SG) legislation does
not cover self-employed workers.
The effects of the Agreement on the coverage of self-employed workers are as follows:
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The Agreement does not have any effect on the coverage of self-employed U.S. nationals
or lawful permanent residents residing in the United States;
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The Agreement exempts U.S. national residing in Australia and working in self-employment
from their ordinary obligations to pay into the U.S. Social Security system;
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The Agreement provides U.S. Social Security coverage for Australian nationals residing
in the United States and working in self-employment; and
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The Agreement does not have any effect on Australian nationals residing in Australia
and engaged in self-employment activity (they continue to have no SG coverage).
As a result, self-employed workers, including U.S. nationals, who are subject only
to Australian laws under the Agreement, are not required to contribute to either country.