Personal Finance

Working for an Overseas company while in Canada

  • Last Updated:
  • May 14th, 2020 1:55 pm
Jul 12, 2011
32 posts

Working for an Overseas company while in Canada


I need some general guidance on how I should approach my tax situation.
I understand I may need to speak to a consultant, but would prefer to get as much knowledge/clarity before I speak to someone.

I am a Canadian Citizen and Australian PR.
Employer is based in Australia.
I am currently working for them from Canada.

Current Payment situation:
Employer pays me in my Australian bank. I transfer it into Canada as needed.
Employer withholds tax as per Australian rate.

Income Tax submission:
I need to do my Canadian Tax return for the year of 2019.
I sort of understand that I can get tax credit as there is a treaty between Australia and Canada.

My questions:
1. Do I need to contribute towards EI/CPP, given my work scenario?
2. My Australian employer is thinking if they should make me a contractor instead of an Employee. I am not sure whether to agree with this or stay as an Employee. Will becoming a contractor be a better option overall? (I work in Australian timing which means usually from 7 pm to 3 am).

1 reply
Jun 18, 2018
90 posts
I have been in a similar situation.

****Note I am not a tax expert**** I checked with one when I was in this position and you should also.

1. You declare 100% of the income in Canada at the Bank of Canada FX rate (your accountant will determine to use annual rate, monthly rate, etc)
2. Taxes paid in Australia will be claimed as "foreign taxes paid". So say you owe 30,000$ of tax on 100% of the income in Canada and paid 20,000$ of tax in Australia, they will calculate 30,000 - 20,000 = 10,000$ owed in Canada or something of that nature.
3. This will be classified as "Foreign income". If I recall that income does not factor into EI. I also recall did not need to contribute to CPP again since foreign income did not require it.
4. Contractor vs employee may change a few things. e.g: employee you may have insurance and health care. Those are taxable benefits. But check with a tax specialist.

For the tax specialist. Just find one that knows about foreign income situations. Pay the person by the hour for a discussion. We spent 2h asking all our questions with a specialist and the meeting fees were tax-deductible to boot!

Hope this helps.