A 3121(l) agreement allows an employee to continue paying payroll taxes into which system?

• A. The host jurisdiction’s social insurance system
• B. The host jurisdiction’s social insurance program only for payroll taxes
• C. No payroll taxes at all
• D. The U.S. payroll tax system

Answer: (D)

A 3121(l) agreement is used in international assignments to coordinate where payroll taxes are paid. It allows an employee who is temporarily abroad to stay under the U.S. payroll tax system (FICA—Social Security and Medicare) rather than switching to the host country’s social insurance system. This helps avoid double social security taxation and preserves U.S. coverage for benefit accrual under the U.S. program, provided the assignment qualifies under the related totalization arrangement. So the employee continues paying payroll taxes into the U.S. system, not into the host jurisdiction’s system or nothing at all.