Key Takeaways
• UK-India Social Security Agreement signed May 6, 2025, eliminates double social security tax for Indian workers in UK.
• Over 60,000 Indian IT workers in the UK will save up to 20% of their salary, totaling £380 million.
• Agreement highlighted H-1B workers in the US, who still lose billions due to lack of a similar deal.
The UK-India Social Security Agreement (SSA), signed as part of a wider Free Trade Agreement on May 6, 2025, marks an important step for Indian workers moving to the United Kingdom 🇬🇧 for jobs. While this deal is a breakthrough for Indians working in the UK, it also shines a light on issues faced by H-1B holders in the United States 🇺🇸—who, despite paying into the system, often cannot access certain benefits. This article explains the details of the new agreement, how it helps Indian workers, and why it’s drawing attention to similar struggles for Indian professionals in other countries.
A Big Change for Indian Workers in the UK
The new UK-India Social Security Agreement aims to stop Indian workers and their employers in the UK from having to pay social security taxes twice—once at home, and then again abroad. Social security, which in the UK is known as National Insurance, helps pay for things like pensions, healthcare, and child benefits.
For Indian workers posted temporarily to the UK, here’s why this agreement matters:
- Salary Savings: Indian workers can keep about 20% more of their salary because they don’t have to pay UK National Insurance if they already contribute to the social security system in India. Over three years, these savings could be significant.
- No Double Deductions: Before this deal, many Indian workers in the UK lost a good chunk of income due to double deductions—paying social security in both countries, even for short postings.
- Easy Exemption: To benefit, employees can get a Certificate of Coverage from India’s Provident Fund office. This proves they continue to make contributions in India, allowing them to skip the UK payment for up to three years.
- Wide Reach for Different Sectors: It’s not just a few; the agreement is likely to help over 60,000 Indian workers in the UK’s IT sector alone.
- Big Financial Impact: Experts predict the total savings for Indian employees and companies could be over Rs 4,000 crore, or about £380 million.
This policy is set to bring real, immediate benefits to Indians who go to the United Kingdom 🇬🇧 for assignments, offering them more take-home pay and making UK postings more attractive.
How the Agreement Works
The social security exemption is not automatic. Both workers and their employers must follow certain steps to qualify:
- The employee gets a Certificate of Coverage from the Indian Provident Fund office before leaving for the UK.
- The certificate confirms ongoing social security contributions in India, so the UK doesn’t charge the worker for National Insurance for up to three years.
- This applies to temporary assignments—longer stays or permanent moves may not qualify.
For those who qualify, the UK-India Social Security Agreement brings relief from a burden many saw as unfair. Previously, a worker on a short, two- or three-year stint in the UK could lose a fifth of their pay to a system from which they would never draw benefits.
Broader Context: Why Double Contributions Were a Problem
Double social security contributions have long been a pain point for people sent abroad on temporary job assignments. Indian companies that send professionals to work in the UK had to pay National Insurance for each worker, even as those same workers and their companies kept paying into India’s system. When these employees finished their assignment and returned home, they generally got nothing back from the UK government for all those payments.
In sectors like information technology or consulting, where short-term international assignments are common, this cost added up. Some firms even hesitated to send skilled Indian workers because of the extra charge, which made them less competitive.
By addressing this problem, the UK-India SSA removes a major roadblock for both employers and workers.
The Impact on Key Stakeholders
Indian Workers and Their Families
The most obvious winners are Indian professionals and their families. By keeping more of their salary, they improve their standard of living abroad and can send more money home.
Indian Companies
Businesses that post staff in the United Kingdom 🇬🇧—especially from sectors like IT, consulting, and finance—will see a noticeable drop in the cost per employee. This may allow Indian companies to compete better, expand in the UK, and support larger teams.
UK Companies Using Indian Talent
For UK firms that depend on Indian expertise, the agreement could lead to smoother hiring and fewer payroll worries. It also signals that the UK is open to skilled Indian professionals and wants good business ties with India 🇮🇳.
Government Benefits
Both the UK and India 🇮🇳 stand to gain from closer business and political ties. Agreements like this keep trade and talent moving and signal trust between nations.
Numbers Behind the Deal
- 20% Salary Savings: Indian workers posted to the UK will save up to 20% of their earnings, depending on how much they would otherwise have paid in National Insurance.
- 60,000+ Employees Impacted: In IT alone, over 60,000 Indian employees are expected to benefit directly.
- Estimated Savings: Savings for Indian companies and their staff could cross Rs 4,000 crore, or about £380 million.
These numbers make it clear the agreement is about more than just paperwork—it affects real people and could shape the business landscape.
For an official explanation of UK-India Social Security Agreement processes and how to get a Certificate of Coverage, readers can refer to the official Indian Ministry of External Affairs social security agreements page.
H-1B Holders: The Situation in the United States
The new UK-India deal draws attention to another group: Indian workers on H-1B visas in the United States 🇺🇸. These H-1B holders have long faced their own social security puzzle.
The H-1B Dilemma
- Paying In, Not Getting Back: Most Indian professionals on H-1B visas pay into the US social security system, with deductions from their paycheck just like US citizens. However, to qualify for US social security benefits, a worker must pay into the system for at least 10 years.
- Short-Term Assignments Lose Out: Many H-1B holders leave the US after 5 or 6 years—before reaching that 10-year mark. The money they paid into social security stays with the US government; they rarely get any payouts after returning home.
- Big Money at Stake: NASSCOM, India’s top IT trade body, estimates Indian IT workers have lost more than $1 billion in US social security contributions because they left before qualifying for any benefits.
These facts mean the situation is costly for both Indian workers and the Indian IT industry, as the workers pay large sums but rarely see returns, hurting both morale and savings.
India’s Push for a US Social Security Agreement
The success of the UK-India social security agreement has put new pressure on Indian officials to try for a similar arrangement with the United States 🇺🇸. India has long asked for a “totalisation agreement”—a deal that would allow Indian professionals to either benefit from their US payments back home or avoid paying into the system completely if already covered by India’s scheme.
What Is a Totalisation Agreement?
A totalisation agreement solves the double payment problem—like the new UK-India deal. If signed with the US, it would help H-1B holders in these ways:
- Match the length of the US stay to Indian social security rules, so the same money isn’t paid twice.
- Allow Indian workers to combine periods of work in both countries to qualify for benefits.
- Make postings to the US less expensive, boosting business and fair treatment for H-1B holders.
However, progress on this front has been slow. According to sources, US officials have concerns about India’s social security system, called the Employees’ Provident Fund Organisation (EPFO). They believe it’s different from the US model, making a direct match tricky.
Will Things Change Soon?
With the upcoming Trump administration, reports suggest India might make a stronger push for a deal with the United States 🇺🇸. If an agreement is reached, it could:
- Lower costs for Indian professionals and the companies that send them to the United States 🇺🇸.
- Build trust and business ties between the two countries.
- Set a fair precedent, like the one now working in the UK-India relationship.
But some roadblocks remain. The US government has not warmed to the idea, pointing to differences in how each country runs its social security system. Also, changing US priorities can slow down progress or send talks back to the starting line.
VisaVerge.com Perspective
As reported by VisaVerge.com, the UK-India Social Security Agreement is a big win for Indian workers in the United Kingdom 🇬🇧 and sets a clear example for other countries. While H-1B holders in the United States 🇺🇸 do not yet benefit from such protection, the success of the UK-India deal makes the case stronger for a US-India totalisation agreement. This could one day let Indian professionals avoid losing billions in unclaimed savings, allowing better mobility and financial security across borders.
Different Viewpoints
Not everyone agrees on the best path forward. Companies and workers in both India 🇮🇳 and the United States 🇺🇸 want fair treatment, but governments must consider legal, administrative, and social system differences. Some US officials argue their social security fund finances services for all, so they hesitate to change the rules for short-term foreign workers. Others point out that productivity and talent flow smoothly when policies are fair and clear.
Looking Ahead: What Could Change for H-1B Holders?
The UK-India Social Security Agreement may inspire other countries to look at their own systems. If the United States 🇺🇸 and India 🇮🇳 can agree, H-1B holders may someday see:
- No more double payments on social security.
- An easier, more attractive system for Indian companies sending staff on short US assignments.
- Workers keeping more of their money and feeling more secure about overseas jobs.
But until such an agreement is made, H-1B holders in the United States 🇺🇸 will keep facing the same problem: paying into a system from which they will likely never receive any benefits unless they stay long enough.
Final Thoughts
The UK-India Social Security Agreement is a remarkable change for Indian workers in the United Kingdom 🇬🇧. It fixes an old problem, helps both workers and companies, and sets the stage for even bigger changes if other countries decide to follow the lead. While H-1B holders in the United States 🇺🇸 do not currently benefit from a similar arrangement, growing interest in a US-India totalisation agreement offers hope for the future.
As global jobs become more common, countries must solve problems like double social security deductions for migrant workers. Agreements like the one between the United Kingdom 🇬🇧 and India 🇮🇳 make work abroad easier, fairer, and more rewarding for everyone involved. If similar deals appear elsewhere, especially in the United States 🇺🇸, the landscape for Indian workers and H-1B holders could improve in meaningful ways, creating a more balanced and just system for global talent.
Learn Today
Social Security Agreement (SSA) → A treaty between countries that helps workers avoid paying social security taxes in both home and host countries.
Certificate of Coverage → An official document from Indian authorities proving workers continue to contribute to India’s social security while abroad.
National Insurance → The UK’s social security system, funding pensions, healthcare, and other welfare benefits for workers.
H-1B Visa → A U.S. non-immigrant visa allowing skilled foreign professionals to work temporarily in specialized fields.
Totalisation Agreement → A bilateral agreement enabling workers to compile social security contributions from both countries for benefit eligibility.
This Article in a Nutshell
The new UK-India Social Security Agreement stops Indian workers from paying double social security taxes in the UK. This means higher take-home salaries and reduced costs for companies. Meanwhile, Indian H-1B holders in the US still face losses, underlining the need for similar agreements elsewhere.
— By VisaVerge.com
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