For the United States, the Agreement applies to the Old-age, Survivors, and Disability Insurance (OASDI) program and corresponding Federal Insurance Contributions Act (FICA) taxes for employment and Self-Employment Contributions Act (SECA) taxes for self-employment. The Agreement does not apply to Medicare provisions. If an employee is exempt from U.S. Social Security coverage under this Agreement, neither the employee's nor the employer's share of the FICA tax is due as long as the exemption is effective. A self-employed person is exempt from paying SECA taxes (equivalent to the employee's and the employer's shares of the FICA tax) for any period the exemption is effective.

The U.S. laws to which the Agreement applies are Title II of the Social Security Act except section 226 (Medicare benefits), 226A (Medicare coverage for certain persons suffering from renal disease) and section 228 (special age-72 payments-Prouty benefits). Hospital insurance under Medicare has been excluded. Individuals to whom the Agreement applies, who qualify independently for Medicare hospital insurance benefits, would be entitled to receive such benefits.

For Japan, the Agreement applies to taxes that finance retirement, survivors and disability benefits, and in some case, taxes for the Japanese health insurance program. Consequently, if a worker is exempt from Japanese coverage because of the Agreement, no contributions are due for these programs.