US Employer paying a Canadian Citizen in Canada?

[slamarre]

Hi,

My future US employer (in 2 weeks) will pay me in US dollars in a Bank account in Canada. This is what they are telling me.

I know that this is possible but how the Federal and Provincial Income tax will be taken?
How i will put those revenu in my 2005 income tax report?
Does the US income tax will be taken even since i am not a US resident? If is it the case, how to get this money back?
Any Advice?

P.S. I will be moving in the US ealry 2006.

[nelsona]

If you are living and working in Canada, then your tax responsibility is ONLY to Canada and Province.

The US employer should not be deducting anything realted to US and should be paying you as a Cdn.

It is up to you to send the Cdn govt your taxes.Since this is a new arrangent for yopu, you can do it at the time you file your return in April.

The firm should also be contributing to CPP/QPP and EI for you.

If you do have US tax incorrectly withheld, you would file a 1040NR, climing zero income, ang get the tax back.

<i>nelsona non grata... and non pro</i>

[slamarre]

How the US employer will contribute to the CPP/QPP and EI?

To Recap, my US employer will not deduct the federal income tax (no state income tax because they are in Florida, lucky me!).

They may/will deduct Benefits like health insurance and probably the social secutiry. Am i right?

Thanks.

[nelsona]

They need to pay you as a CDn employee, most likley thru a Cdn payroll service.

That or pay you a as a contractor until you move there.

Under no circumstance should you be paying Social Security premiums until you move.

<i>nelsona non grata... and non pro</i>

[windman]

Hi.

I'm in the same situation. I am the sole employee of a US company in Canada. We got around this by hiring ADP to do all the deductions as required by Canadian and Quebec law. They're in most big Canadian cities. It's fairly straightforward. Your company sends the required amount to ADP and ADP makes all the required contributions and sends you monthly payslips.

What isn't straightforward is how the 401k pension benefits my US colleagues receive can be put into an equivalent scheme over here. If you have any ideas, I'm all ears.

all best
Peter

[nelsona]

how [can] the 401k pension benefits my US colleagues receive can be put into an equivalent scheme over here

Pretty simple, if your employer is willing: It's called an RRSP. Perhaps you've heard of it.

Out of your take home pay, You put X into the RRSP, provide the receipt to your employer, and he gives you a check for Y (the equivalent of the 'matching funds' your US buddies get) and you show him the receipt for Y deposit to your RRSP as proof.

Y is added to your income. X and Y (plus whatever else you contribute) are your deductible RRSP contributions.