TAX WITHHOLDING ON W-2

This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.

Moderator: Mark T Serbinski CA CPA

Post Reply
Stuart
Posts: 10
Joined: Wed May 04, 2005 11:07 pm

TAX WITHHOLDING ON W-2

Post by Stuart »

Hello All,

I have an opportunity to work on W2 in the US. I have always worked corp to corp before. I am wondering if someone could tell me the avg % of total income that is withheld when someone works on w2.

Thanks,
Stu
Mark T Serbinski CA CPA
Site Admin
Posts: 611
Joined: Tue Oct 26, 2004 8:05 pm
Contact:

Post by Mark T Serbinski CA CPA »

You will be subject to federal and possibly state income tax withholding based on your W4 submitted. The W4 outlines the number of exemptions you have (similar to a Canadian TD 1) and controls the withholding rate. Your rate will also be based on the income you are earning, with more tax % withheld the higher your income is.

Further, unless you are covered by CPP and working for a Canadian company in the U.S., you will be subject to 7.65% FICA deductions on the first $94,200 per year, and 1.45% after that.
Mark
Stuart
Posts: 10
Joined: Wed May 04, 2005 11:07 pm

Post by Stuart »

Thanks very much Mark. I appreciate the info. One thing becomes clearer to me; it is better to be on a corp to corp unless the obvious trade off is getting a perm role in which case the move to US is going to be for GC and therefore a more permanent one. On that front, may I ask what is PERM. I have read on this forum that people have been discussing GC route that starts with this term"PERM". What does this exactly mean? I am sorry for being so ignorant.
Thanks, Stu
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

PERM is a step along GC route, which is best discussed on immigration sites, not here.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
Post Reply