Most government employees do not pay Social Security taxes, but some do

Whether a government employee pays into Social Security depends on when they were hired and what type of government job they hold. Federal employees hired before 1984 are covered by the Civil Service Retirement System (CSRS) and do not pay Social Security taxes. Federal employees hired in 1984 or later are covered by the Federal Employees Retirement System (FERS) and do pay Social Security taxes. State and local government employees follow different rules that vary by employer and pension plan.

This distinction matters because it affects how much retirement income you will receive and when you can start drawing it. An employee who never paid into Social Security cannot later claim Social Security benefits based on their own work record, even if they worked in the private sector at other times in their life.

Key Takeaways

  • Federal employees hired before 1984 under CSRS do not pay Social Security taxes and cannot claim Social Security benefits on their own government work record.
  • Federal employees hired in 1984 or later under FERS pay both Social Security and Medicare taxes, just like private-sector workers.
  • State and local government employees may or may not pay Social Security, depending on their employer's pension plan and state law.
  • If you worked in both government and private-sector jobs, you may be subject to the Windfall Elimination Provision, which can reduce your Social Security benefit.

Federal employees under CSRS do not pay Social Security

The Civil Service Retirement System was the standard retirement plan for federal workers until 1984. Employees in CSRS pay into their own pension fund instead of Social Security. They do not see Social Security tax withheld from their paychecks, and they do not build up Social Security credits for their federal service.

CSRS employees receive a pension based on their years of service and salary history. This pension is often more generous than what Social Security would provide, which is why the federal government did not require them to participate in Social Security. However, if a CSRS employee worked in private-sector jobs or other positions covered by Social Security, they can still claim benefits based on that non-government work.

Federal employees under FERS pay Social Security taxes

The Federal Employees Retirement System replaced CSRS in 1984. All federal employees hired from 1984 onward are covered by FERS. These employees pay Social Security taxes at the same rate as private-sector workers — 6.2 percent of wages up to the annual earnings cap, plus 1.45 percent for Medicare.

FERS employees receive three sources of retirement income: a FERS pension, Social Security, and the Thrift Savings Plan (a 401(k)-style account). Because they pay into Social Security, they build up credits toward a Social Security benefit based on their federal service. The combination of a FERS pension plus Social Security is designed to replace the more generous CSRS pension.

State and local government employees have varying coverage

State and local government employees are not automatically covered by Social Security. Instead, each state and local employer decides whether to participate in Social Security or maintain its own pension system. Some states cover all their employees in Social Security. Others cover none. Many cover some employees but not others, depending on the job classification or pension plan.

To find out whether your state or local government job is covered by Social Security, contact your employer's human resources or payroll department directly. They can tell you whether Social Security tax is being withheld from your paycheck. You can also check your Social Security statement online at ssa.gov to see whether your government employer is listed among your work records.

The Windfall Elimination Provision affects mixed work histories

If you worked in a government job not covered by Social Security and also worked in private-sector jobs covered by Social Security, the Windfall Elimination Provision (WEP) may reduce your Social Security benefit. The WEP was designed to prevent workers from receiving a higher benefit than they would have if all their work had been covered by Social Security.

The WEP reduction applies to your own Social Security benefit based on your private-sector work, not to benefits you might receive as a spouse or survivor. The reduction can be substantial — up to 50 percent of your non-covered government pension in some cases. If you are affected by WEP, the Social Security Administration will notify you before you start drawing benefits and explain the reduction amount.

You can estimate your WEP reduction by using the Social Security Administration's WEP calculator on their website, or by contacting Social Security directly at 1-800-772-1213.

How to find out your own coverage status

The easiest way to confirm whether you pay Social Security taxes is to look at your most recent pay stub. If you see "Social Security" or "OASDI" (Old-Age, Survivors, and Disability Insurance) listed as a deduction, you are covered. If you see no such deduction, you are not covered by Social Security for that job.

You can also create a free account on ssa.gov and view your Social Security statement. This statement shows all the employers who have reported earnings to Social Security under your name. If your government employer appears on the list, you are covered. If it does not, you are not.

If you are unsure whether your employer participates in Social Security, call your employer's payroll office or the Social Security Administration at 1-800-772-1213. Have your employer name and your job title ready when you call.

What happens at retirement if you were not covered

If you spent your entire career in a government job not covered by Social Security, you will not receive a Social Security benefit based on that work. Instead, you will receive only your government pension. This is true even if you worked for 30 or 40 years in that job.

However, if you also worked in private-sector jobs covered by Social Security, you can claim a benefit based on that work alone. The amount will depend on how many credits you earned and your average earnings in covered work. You do not need to have worked in covered employment for your entire career to receive a benefit — you need only 40 credits, which is roughly 10 years of covered work.

Frequently Asked Questions

Can a CSRS employee ever get Social Security benefits?

Yes, if they worked in private-sector jobs or other positions covered by Social Security. They can claim a benefit based on that covered work. However, they cannot claim a benefit based on their CSRS federal service, because they never paid Social Security taxes on those wages.

Do I lose my government pension if I also claim Social Security?

No. Your government pension and Social Security are separate. You can receive both. However, if you are subject to the Windfall Elimination Provision, your Social Security benefit will be reduced based on your non-covered government pension amount.

What is the difference between CSRS and FERS?

CSRS employees (hired before 1984) do not pay Social Security taxes and receive only a CSRS pension. FERS employees (hired 1984 or later) pay Social Security taxes, receive a FERS pension, and also build up a Social Security benefit. FERS employees typically receive lower pensions but have the added Social Security income.

How do I know if my state or local job is covered by Social Security?

Check your pay stub for Social Security tax withholding, or contact your employer's payroll office. You can also view your Social Security statement at ssa.gov to see whether your employer is listed in your work history.

If I worked for the government and then in the private sector, will WEP affect me?

Only if you worked in a government job not covered by Social Security. If your government job was covered by Social Security (like FERS), WEP does not explore. Contact Social Security at 1-800-772-1213 to find out whether you are affected.