Pay stub for an F-1 OPT employee (no FICA)

If you employ someone on F-1 OPT, the pay stub looks almost like any other, with one difference: there are no Social Security or Medicare lines. An F-1 student who is a nonresident alien for tax purposes is exempt from FICA, so you do not withhold it and you do not owe the employer match. You still withhold federal and Massachusetts income tax. This guide covers exactly what goes on the stub, and what stays off it.

SimpleStub makes the pay stub. It does not file your taxes or give tax advice. Confirm the employee's residency status before you rely on the exemption.

Do you withhold FICA for an F-1 OPT employee?

No, generally not. F-1 students who are nonresident aliens for tax purposes are exempt from Social Security and Medicare (FICA) on services allowed by their F-1 status, and OPT and STEM OPT are included. This is set by IRC 3121(b)(19), and it exempts both the employee and the employer, so there is no employer match to pay either.

Two taxes you might expect are therefore absent:

• Social Security (OASDI), normally 6.2% from the employee and 6.2% from the employer.
• Medicare, normally 1.45% from the employee and 1.45% from the employer.

Federal unemployment tax (FUTA) is also generally not owed on F-1 nonresident-alien student wages, under IRC 3306(c)(19). FUTA is employer-paid and never appears on a stub, but it is one less thing you owe.

What is the F-1 FICA exemption, exactly?

The exemption applies to F-1 students who are nonresident aliens for tax purposes. It is not about the OPT card by itself; it follows the person's tax residency. While the student is a nonresident alien, wages for F-1-authorized work are exempt from FICA. The student's I-20 with the OPT or STEM OPT endorsement, I-94, passport and visa, and EAD card document both the work authorization and the basis for the FICA exemption. Keep copies on file.

When does the FICA exemption stop?

It stops when the employee becomes a resident alien for tax purposes. F-1 students are generally treated as nonresident aliens for their first five calendar years of presence in the US. After that window, the substantial presence test can make them a resident alien, and once that happens, FICA applies like it would for any other employee. Check the employee's status each year rather than assuming the exemption is permanent.

What taxes do you still withhold?

Income tax does not get the exemption. You withhold and report it the same as for any W-2 employee.

Massachusetts income tax is a flat 5.0%. The employee PFML contribution is a post-tax deduction, so it does not reduce taxable wages, and it stops at the Social Security wage base for the year.

What should the F-1 OPT pay stub show?

The stub should show gross pay, the income taxes you do withhold, the PFML deduction, and net pay, with no FICA lines. Concretely:

• Gross pay for the period, with year-to-date.
• Federal income tax withheld (current and YTD).
• Massachusetts income tax withheld at 5.0% (current and YTD).
• Employee MA PFML contribution (current and YTD), as a post-tax deduction.
• Net pay, current and YTD.
• No Social Security line and no Medicare line, for as long as the FICA exemption applies.

Massachusetts also requires the stub itself to carry certain fields every pay period under M.G.L. c. 149, s. 148: the employer name, the employee name, the pay-period dates, hours worked, the rate of pay, and all deductions. An authentic stub includes these regardless of visa status.

How is the W-2 different for an F-1 OPT employee?

Because no FICA was withheld, the Social Security and Medicare boxes on the W-2 (boxes 3 through 6) are blank. Wages still go in box 1, and you furnish the W-2 to the employee and the SSA by January 31. The year-to-date totals on the final pay stub of the year should reconcile to the W-2, which is one more reason the stub must track YTD correctly all year.

What else does employing an F-1 STEM OPT student require?

Beyond payroll, STEM OPT carries employer obligations that are easy to miss:

• Be enrolled in E-Verify. An employer must be enrolled to employ a STEM OPT student.
• Complete and sign Form I-983, the training plan, and keep it on file.
• Keep a copy of the valid EAD card and employ the person only within its dates.
• Run Form I-9 for the employee, like any hire.
• Report a termination or departure to the student's DSO within the required window.

These do not change the pay stub, but they are part of doing it right.