Thousands of Americans working in Germany will be freed from paying German social security taxes under a new international agreement.

Instead, they will pay U.S. social security taxes only. It will be substantial fiscal relief for the many thousands who now pay hefty social security levies to both countries. The savings to an American employe in Germany could be as high as $2,119 a year.

Under the same agreement, at least 45,000 retired Americans who have worked in Germany in the past, including former Germans who emigrated to the United States, will begin collecting $20 million a year in Germany social security benefits. This is in addition to anything they get in U.S. benefits. They will become eligible for these German payments by being allowed to combine their work records from both countries for eligibility purposes.

Many Americans who didn't work in Germany long enough to meet the 15-year eligibilty minimum will be able to combine their German work record with their work record in the United States to meet the requirement.

Additional thousands of Jews and other Americans - perhaps as many as 20,000 - who fled from Nazi persecution between1933 and 1945 will be allowed to "buy back in" to the German social security system. They may make back social security tax payments of what they would have paid had they remained in Germany. In many cases, these payments will be substantial, but they will then allow the payer to become eligible for Germany's social security benefits on reaching retirement age.

These provisions are all part of a social security "totalization" agreement negotiated with Germany and sent to Congress in September. Either chamber could veto it, but that seems unlikely. The provisions are expected to go into effect in the middle of next year.

A similar agreement with Italy affecting a far smaller number of workers in effect. Secretary of Health, Education and Welfare Joseph A. Califano Jr. has been conferring in Jerusalem about a possible U.S.-Israel social security agreement.

The provisions are designed to reduce the burdens of dual social security taxation, allow persons who worked in both countries to combine earnings records, and afford some relief to Nazi victims who lost German eligibility.

The agreement is reciprocal, and Germans who work or have worked in the United States will benefit. But their number is far smaller than Americans who will benefit. Only about 2,000 Germans now working in the United States will be freed from dual taxation, and only about 4,000 German retirees will start drawing old-age benefits from the U.S. system.

Under the tax provisions in effect prior to the agreement, an American working in Germany for a U.S. firm generally paid both the U.S. social security tax (currently 6.05 percent on the first $17,700 a year of earnings) and the 9 percent German old-age tax> currently levied on the first 44,400 marks (about $23,554 at current exchange rates) of earnings a year. In addition, he or she paid a German levy for health and unemployment insurance.

This won't be changed by the agreement. For a worker at maximum salary, the U.S. tax would total $1,071 a year and the 9 percent German tax $2,119.

Under the agreement, such workers henceforth will pay only the U.S. tax.

Prior to the agreement, Americans working for German firms in Germany generally paid only the German tax.

Under the agreement, if the employe were hired in the United States by the German firm and then sent to Germany, he would pay a U.S. tax. But if he were hired in Germany, he would continue to pay the German tax.

Official German figures a few years ago indicated that there were only 12,000 Americans paying the German social security tax. (American armed forces personnel there are exempt.) however, sources in the U.S. Social Security Administration say the German figure is "far too low." The real number may be as high as 20,000 to 30,000, with a substantial portion potentially eligible for the end of dual taxation.