H1 in US but staying in Canada.

njdude26 · Post by **njdude26** » Fri Jul 21, 2006 6:48 pm

I will be living in Canada on a PR card starting Oct'06. But I will have a valid H1 to work in the US. I will be working for the same company in Canada. I would like to receive my salary still in the US. one reason being that I dont want my employer in anyway to reduce my salary thinking that salaries are low in canada !

So my question is, is anyone doing this . remotely working on a H1 for a US company but staying in Toronto. What are the tax problems ? do i still file a 1040 in the US and what about canadian taxes ??

Any help would be appreciated.

nelsona · Post by **nelsona** » Sat Jul 22, 2006 7:01 am

The problem is that an employee working in Canada, and the employer must pay/withold Cdn payroll taxes, like Cdn/Prov tax, EI and CPP.

There really is no choice in this. And will be simple to do for your firm since they already have presence in Canada.

It is up to you to negociate a better salary.

njdude26 · Post by **njdude26** » Sat Jul 22, 2006 10:35 am

No I dont have to be an employee of the Canadian company. I will just be either working from home in Canada or at the canadian premises...

nelsona · Post by **nelsona** » Sat Jul 22, 2006 11:06 am

I didn't say you 'have to' be an employee of the Cdn company.

I said that IF one is an employee (of some company, Cdn-based or not) working IN Canada, one must abide by CRA rules for employees, which I outlined.

Whether you work as an employee for ABC US, or ABC Canada, you must be paid as a Cdn employee; there are 1000's of Cdns working directly for US firms in this manner, and are being paid in the same manner as all other Cdn employees.

If you are not wishing to be an employee, you are quite free to become a contractor, and be paid a flat fee, with no benefits. That is up to you to negociate.

I would however, verify if you are allowed to do this based on your PR application, which may or may not have hinged on you working for a Cdn company.