Journal / Essay · Labor

The Math of Paying In

Undocumented workers paid an estimated $96.7 billion in U.S. taxes in 2022 — more than a third of it straight into Social Security and Medicare. The same status that keeps them off the official payroll also keeps them from ever collecting a dime back.

And Then You're Dead · August 2026 · 8 min read

Every undocumented worker on a real payroll has a number attached to their paycheck — a borrowed Social Security number, an invented one, or a valid Individual Taxpayer Identification Number the IRS issues for this purpose. Either way, the deduction on the pay stub looks identical to everyone else's: federal and state tax withheld, 6.2% for Social Security, 1.45% for Medicare. The money leaves the paycheck the same way it leaves a citizen's. What happens to it afterward is where the math stops working the same way for everyone.

What Gets Paid

The Institute on Taxation and Economic Policy, a nonpartisan research group, updated its national estimate in 2024 using 2022 tax-year data — and the number is bigger than most assumptions about who pays taxes in this country.

Of the $96.7 billion, $59.4 billion went to the federal government and $37.3 billion to state and local governments. More than a third is FICA withholding — payroll tax earmarked specifically for Social Security and Medicare, the two programs an undocumented worker is most clearly barred from ever drawing on. Grant every undocumented worker legal authorization tomorrow, and ITEP estimates their combined tax contribution would rise by another $40.2 billion a year, to $136.9 billion, because authorized wages are harder to underpay and easier to tax in full. This workforce isn't contributing less than it could. It's being taxed on money it structurally can't fully report or protect.

A Higher Rate Than the Penthouse

In 40 states, undocumented immigrants pay a higher share of their income in state and local taxes than the wealthiest 1 percent of households do.

Sales, excise, and property tax (paid directly or passed through rent) fall hardest on people who spend nearly everything they earn, because they have to. ITEP calculates the average undocumented household pays 8.9% of its income in state and local taxes, versus 7.2% for the top 1% nationally. In Florida, which has no state income tax, undocumented immigrants pay an average 8% rate; the top 1% pay 2.7%. Six states each collect more than $1 billion a year from undocumented residents — California ($8.5B), Texas ($4.9B), New York ($3.1B), Florida ($1.8B), Illinois ($1.5B), and New Jersey ($1.3B) — from a population that, in most of those states, can't vote on how it's spent and can't legally claim most of what it funds.

The File Nobody Can Claim From

The clearest illustration of where the money goes sits inside the Social Security Administration itself, in something called the Earnings Suspense File — the electronic holding pen for W-2 wage reports where the name and number don't match SSA's records: invalid numbers, mismatched numbers, numbers already assigned to someone else. The employer still withholds and remits the tax. SSA still collects it. It just can't credit it to anyone's earnings record, so it sits there instead, unclaimed and effectively unclaimable.

SSA's own Office of the Inspector General has been blunt about where most of that money originates, writing that "the chief cause of wage items being posted to the [Earnings Suspense File] instead of an individual's earnings record is unauthorized work by noncitizens." By 2013, cumulative wages piled up in the file since 1990 alone totaled $952.4 billion, per a Government Accountability Office analysis of SSA data — most of a trillion dollars in reported wages, taxed at the point of payroll, that never resolved into a benefit anyone can claim.

SSA's Office of the Chief Actuary put it plainly in Actuarial Note No. 151: unauthorized work has, on net, a positive effect on Social Security's finances, because the workers generating it are structurally unlikely to ever file for benefits under those earnings. It's a rare federal program where the people propping it up are the same people it's designed to exclude.

Who's Actually Doing This Work

The population behind these numbers is not small, and it's growing. Pew Research Center's most recent estimate put the U.S. unauthorized immigrant population at 14 million as of mid-2023 — a record, up from a prior peak of 12.2 million in 2007, and a 3.5 million increase over the two prior years alone, the fastest two-year rise on record. Of that population, 9.7 million were in the labor force, also a record, making up 5.6% of all U.S. workers — the highest share ever measured.

That labor isn't spread evenly. Construction has the highest concentration of any industry, at about 15% of its workforce; agriculture is close behind at 14%; leisure and hospitality sits at 8%. These are the industries where the physical work happens outdoors — on ladders, on roofs, in fields, kitchens, and hotel hallways — work that doesn't pause for a legal-status check before the shift starts.

Underpaid, and Unable to Say So

Paying into a system you can't draw from is one half of the math. The other half: the same workers are shortchanged more often on the wages they do keep — and are the least able to do anything about it.

Those figures come from "Broken Laws, Unprotected Workers," a 2009 survey of 4,387 low-wage workers across New York, Los Angeles, and Chicago. Workers with legal authorization fell in between, at 24%. Same low-wage industries, same cities, same jobs — and the rate of getting paid less than the law requires more than doubled for workers without status. A separate finding: roughly half the workers who reported a workplace injury to their employer said they faced retaliation, including being reported to immigration authorities.

That dynamic hasn't gone away. Massachusetts's attorney general logged 3,384 wage-theft complaints from January through May of 2026, up 16% year over year. Advocates describe employers using immigration status openly as leverage. "If anything happens, the first thing that employers do to pull threats is call ICE," one Everett, Massachusetts construction worker told the Boston Globe in August 2026. A worker-center co-director put it more bluntly: employers who want to exploit workers "seem to have the green light to continue exploiting." Meanwhile, one Boston legal-aid group reported the wage-theft cases it could formally take on had fallen by half over the same period — not because the underlying theft stopped, but because fewer workers felt safe pursuing it through the courts.

What They Can't Touch

Set against all of that is a long list of what undocumented immigrants are legally barred from, no matter how much they've paid in: SNAP, Temporary Assistance for Needy Families, Supplemental Security Income, the Children's Health Insurance Program, non-emergency Medicaid, federal housing assistance, unemployment insurance, ACA marketplace subsidies, Pell Grants, and Social Security retirement or disability benefits. The exceptions are narrow and mostly reactive: emergency Medicaid, WIC in some circumstances, public K-12 schools, and short-term disaster relief.

2025 federal legislation narrowed the list further: the Child Tax Credit, the Additional Child Tax Credit, and the Earned Income Tax Credit now require a valid Social Security number to claim, excluding undocumented parents who file using an ITIN even when their U.S.-citizen children would otherwise qualify. Federal policy later that year also expanded what counts as a restricted "federal public benefit" to include Head Start and community health centers; a court temporarily blocked part of that expansion, but the direction was clear.

And Then You're Dead

None of this requires a hidden ledger. It's public data, published by the agencies that collect the money: the IRS takes the returns, the Social Security Administration banks the payroll tax, the Chief Actuary's office writes in an official report that the arrangement is a net positive for the program's solvency — and none of them dispute that the person who paid in will almost certainly never collect. A worker can fund the system, get underpaid within it at twice the rate of a citizen doing the same job, and still be legally barred from the safety net that tax was supposed to build. The paycheck deduction doesn't know any of that. It just takes its 7.65% either way.

That's it. That's the whole thing.

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