Temporary Work Permit & Taxes

[mjcart25]

I am a US Citizen who is about to enter Ontario for a 9-10 month assignmnet on a Temporary Work Permit. I have lots of questions and this forum has been helpful. The company that I work for has told me that they will pay me using US payroll deductions even though they have a limited partnership in Canada. They do plan to notify the province of my earnings.

This arrangement does not seem to be the most employee friendly approach. What is your assessment?

Will 401(K) contributions be deducted from my gross income as in the US or is that different in Canada? Will this be taxed double? (now by Canada and in retirement when distributions are taken)


I think that saw a post that said not taking Canadian payroll deductions can potentially create cash flow problems for the employee; is that the same for my situation described above?

I earn $80,000 + USD and contribute the max to 401(k) each year to defer some taxable income.

Any advice is more that appreciated.

[nelsona]

Your 401(k) deduction will be accepted in Canada, as of 2009.

How exactly will your firm "notify" both the Cdn Fed and provincial taxation authorities? Other than withholding and remitting Cdn taxes and payroll taxes, I don't know of any other 'notification' process.