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Federal employees will not be allowed to opt out of the payroll withholding change regarding Social Security, according to one of the central payroll providers and memos sent to employees of several agencies.

Under the policy, agencies are to soon stop payroll withholding of the 6.2 Social Security payroll tax through December—except for those under the CSRS system, who don’t pay that tax, and those who earn $4,000 or more during a pay period.


Payroll providers are to make the determination on the pay threshold on a per-pay period basis, meaning that some employees around that threshold could see their status change from one to the next, depending on earning more or fewer pay add-ons.

One of those providers, the Defense Finance and Accounting Service, has posted a notice saying that federal employees “are not eligible to opt-out of the deferral if their Social Security wages fall within the stated limits.” Several agencies also have told their employees the same.

Many employees have said they would prefer to opt out, calling the change a loan they don’t need or want that will only complicate their tax situation and potentially put them at risk of tax penalties if not handled correctly. Federal unions have made that same argument, adding that by the time repayment is required, many employees may have forgotten about the liability and may not be able to afford repayments.

The unions and some members of Congress have been urging the administration to allow employees to opt out for those reasons, noting that some private sector companies also making that change—many have decided not to—are allowing their employees a choice. There has been no response from the administration that would indicate any chance that federal employees will be given the same option, though.

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2022 Federal Employees Handbook