Which US Workers Are Not Covered by Social Security?

Most US workers pay into Social Security, but some don't: certain state and local government employees covered by a public pension instead, federal employees under the older Civil Service Retirement System (CSRS), railroad workers, and specific students, family employees and nonresident visa holders. Work in a non-covered job earns no Social Security credits from that job.

This matters to payroll teams setting up tax codes, and to anyone wondering why their Social Security statement looks thin after years in public service.

Key takeaways

• Coverage depends on the job, not the person. One worker can hold both covered and non-covered jobs.
• The SSA says about 72 percent of state and local public employees work in covered jobs, so non-coverage is the exception.
• Railroad workers are covered by the Railroad Retirement Board for their railroad service.
• The Social Security Fairness Act ended the WEP and GPO benefit reductions; December 2023 was the last month they applied.
• Public employers must still give Form SSA-1945 to new hires in non-covered jobs.

Who is not covered by Social Security?

Group	Why they are outside Social Security	What they have instead
Some state and local government employees	The position is covered by a public retirement system and wasn't brought into Social Security	State or local pension plan
Federal employees under CSRS	CSRS is the older federal retirement system; FERS, which includes Social Security, covers new federal civilian employees	CSRS annuity
Railroad employees	Railroad service falls under the federal railroad retirement program	Railroad Retirement Board benefits
Students working for their own school	Student exemption for those enrolled and regularly attending classes (public schools: unless a Section 218 agreement covers them)	None from that job
Nonresident aliens on F, J, M or Q visas	Exempt when the work is for the purpose of the visa	Home country system, if any
Children under 18 working for a parent	Family employment exception for a sole proprietorship or a partnership of the child's parents	None from that job
Members of certain religious sects	Exemption for recognized sects opposed to insurance, when employer and employee are both members	Community or personal arrangements

Why are some state and local government employees not covered?

This is the largest non-covered group. The Social Security Administration says coverage for state and local government employees is "unique" because of special coverage provisions in the Social Security Act. Over the years, some public employers brought their workers into Social Security, while others kept certain positions solely in a public pension plan.

The SSA's Social Security Fairness Act page gives public school educators, firefighters and police in many states as examples of people with pensions from non-covered work. It also notes that about 72 percent of state and local public employees are in covered jobs. So don't assume a public job is non-covered. Check.

For payroll teams, the practical problem is that one employer can run both covered and non-covered positions. A teacher might be non-covered while the district's bus drivers are covered. Coding errors lead to missing or incorrect withholding, which is painful to unwind across several years of W-2s. The SSA directs public employers with coverage questions to their State Social Security Administrator, and that office is the right first call when a position's status is unclear.

Which other groups are outside Social Security?

Federal and railroad employees

Federal workers covered by CSRS didn't pay Social Security tax on their federal wages. According to the Office of Personnel Management, Congress created the Federal Employees Retirement System (FERS) in 1986, effective January 1, 1987, and new federal civilian employees with retirement coverage have been covered by FERS since then. FERS benefits come from three sources: a basic benefit plan, Social Security and the Thrift Savings Plan. So most of today's federal workforce is covered.

Railroad workers have their own federal program. The Railroad Retirement Board pays retirement, survivor, disability, sickness and unemployment benefits to railroad employees and their families, so railroad service is handled outside the standard Social Security system.

Students, family employees, visa holders and religious exemptions

IRS Publication 15 lays out several narrower exceptions. Each comes with conditions, so read the exact wording before you change a payroll setting.

• Students: A student who is enrolled and regularly attending classes and works for a private school, college or university is exempt from Social Security and Medicare on those wages. For a public school, college or university, the student is exempt unless the services are covered by a Section 218 agreement.
• Nonresident aliens: Students, scholars, trainees and teachers on F, J, M or Q visas are exempt when the work is performed for the purpose of the visa. Those taxes may apply if the person becomes a resident alien for tax purposes, so recheck status every year. Our F-1 student I-9 verification guide covers the hiring paperwork.
• Children working for a parent: Pay to a child under 18 for work in a parent's trade or business isn't subject to Social Security and Medicare if the business is a sole proprietorship or a partnership in which each partner is a parent of the child.
• Spouses: The reverse is true here. Wages paid to a spouse working in the other spouse's trade or business are subject to Social Security and Medicare.
• Religious sects: An exemption is available to members of a recognized religious sect opposed to insurance, but only if both the employee and the employer are members. Clergy have separate rules covered in IRS Publication 517.

For context on how these taxes fit alongside income tax, see our explainer on income tax versus payroll tax. If you're comparing which taxes employees pay at all, our guide to employer-only payroll taxes is a useful companion.

What changed with the Social Security Fairness Act?

Before 2025, people with a pension from non-covered work could see their own or spousal Social Security benefits cut by the Windfall Elimination Provision (WEP) or the Government Pension Offset (GPO). The SSA states that the Social Security Fairness Act was signed into law on January 5, 2025, and ended both provisions. December 2023 was the last month they applied, so benefits payable for January 2024 onward are no longer reduced.

The SSA says more than 2.8 million people with non-covered pensions had their benefits reduced or eliminated by these rules. Two things didn't change. Non-covered work still earns no Social Security credits. And employers still have to give Form SSA-1945, "Statement Concerning Your Employment in a Job Not Covered by Social Security," to employees hired into non-covered jobs on or after January 1, 2005. The SSA notes the repeal didn't remove that requirement.

If you're explaining this to employees, our article on why Social Security benefits matter gives helpful background on what the program pays.

Checklist for employers with non-covered positions

1. List every position and record whether it's covered, and why.
2. Confirm tax codes in payroll match that list, position by position.
3. Give Form SSA-1945 to new hires in non-covered jobs and keep the signed copy.
4. Recheck nonresident alien employees each year for a change to resident status.
5. Review student workers' enrollment status each term.
6. Contact your State Social Security Administrator when a public position's status is unclear.

FAQ

Do teachers get Social Security?

It depends on the state and district. Many teachers are in covered jobs, but in some states teachers participate only in a state pension plan and don't pay Social Security tax on their teaching wages. They can still earn Social Security credits from other covered work, such as summer jobs or an earlier career, and may qualify for spousal or survivor benefits.

Can someone in a non-covered job still get Social Security?

Yes, if they earned enough credits from other covered work, or qualify for spousal or survivor benefits. Coverage is tied to each job, not the person. Since the Social Security Fairness Act ended WEP and GPO, a pension from non-covered work no longer reduces those benefits for months from January 2024 onward.

What should employers check for non-covered positions?

Confirm each position's coverage status, set tax codes correctly, give Form SSA-1945 to new hires in non-covered jobs and keep records of why each position is exempt. Public employers should contact their State Social Security Administrator when coverage is unclear. Review W-2 reporting at year-end too, as covered in our payroll year-end W-2 checklist.

What to do next

• Audit position-level Social Security settings this quarter if you run payroll for a public employer, a university or a business with visa holders or family employees.
• Write down the legal basis for each non-covered position so the next payroll lead doesn't have to guess.
• Confirm your SSA-1945 process is still running for new non-covered hires.
• If you're an employee, check your Social Security earnings record to see which jobs counted.

Last reviewed: October 2026.

Sources

• Social Security Fairness Act: WEP and GPO update, Social Security Administration
• State and Local Government Employers, Social Security Administration
• Publication 15, Employer's Tax Guide, Internal Revenue Service
• FERS Information, U.S. Office of Personnel Management