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Working for US Companies - how do you get paid

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  • Oct 5th, 2021 2:13 pm
[OP]
Deal Addict
Jan 1, 2017
1788 posts
1805 upvotes

Working for US Companies - how do you get paid

Hi Everyone,

I know there a few people on here working remotely from Canada for US companies without Canadian offices. I have a few questions:
1. How do you get paid? Eg paid into a US dollar account at Canadian bank or us dollar account at a us bank. Is it a wire or some other method?
2. Are you paid as a contractor or as an employee?
3. Do you pay US or Canadian taxes?
4. Any strategies for minimizing taxes?
8 replies
Deal Addict
User avatar
Oct 14, 2009
1005 posts
457 upvotes
Windsor, Ont.
1 - I have a US bank account at a US bank. I set it up in the before times when I would cross the border to go to work. I get paid through ACH, which is sort of like the US direct deposit (https://en.wikipedia.org/wiki/ACH_Network). My employer just pushes the payment to my account.

I think most people use a US account like the RBC US account. It's probably more convenient: https://www.rbcbank.com/cross-border/us ... s.html#new

2 - I'm paid as an employee. But it was never something I discussed when I was hired.

3 - I file taxes in both countries. I pay taxes in the US for my US employment income. Then when I file my Canadian taxes I use the US taxes paid as a tax credit so I'm not double taxed. It cancels most of the Canadian taxes out, but I still end up paying a couple hundred in Canadian taxes.

4 - I probably should have talked to someone about it, but I've been too lazy, so I never looked into it.
Sr. Member
User avatar
Aug 20, 2021
751 posts
585 upvotes
Toronto
ugly wrote: 1 - I have a US bank account at a US bank. I set it up in the before times when I would cross the border to go to work. I get paid through ACH, which is sort of like the US direct deposit (https://en.wikipedia.org/wiki/ACH_Network). My employer just pushes the payment to my account.

I think most people use a US account like the RBC US account. It's probably more convenient: https://www.rbcbank.com/cross-border/us ... s.html#new

2 - I'm paid as an employee. But it was never something I discussed when I was hired.

3 - I file taxes in both countries. I pay taxes in the US for my US employment income. Then when I file my Canadian taxes I use the US taxes paid as a tax credit so I'm not double taxed. It cancels most of the Canadian taxes out, but I still end up paying a couple hundred in Canadian taxes.

4 - I probably should have talked to someone about it, but I've been too lazy, so I never looked into it.
just out of curiosity, does your US employer issue you a T4 slip?
Deal Addict
User avatar
Oct 14, 2009
1005 posts
457 upvotes
Windsor, Ont.
ElBorak wrote: just out of curiosity, does your US employer issue you a T4 slip?
No. I get the US W-2 slip.
Jr. Member
Jun 29, 2010
133 posts
183 upvotes
Toronto
ugly wrote: No. I get the US W-2 slip.
Are you on a work visa? or green card holder?
Deal Addict
User avatar
Oct 14, 2009
1005 posts
457 upvotes
Windsor, Ont.
jefouyang wrote: Are you on a work visa? or green card holder?
I just have TN status. In normal times, I would cross daily.
Jr. Member
Oct 22, 2020
109 posts
91 upvotes
ugly wrote: 3 - I file taxes in both countries. I pay taxes in the US for my US employment income. Then when I file my Canadian taxes I use the US taxes paid as a tax credit so I'm not double taxed. It cancels most of the Canadian taxes out, but I still end up paying a couple hundred in Canadian taxes.
I know you mentioned further down for that you are were a commuter (now with Covid you are a remote employee for the time being) and I presume know the tax rules. But for the other people reading, that's is not how it works with the CRA to normally pay all US taxes for just being employed by a US based company. Normally when one is physically present in Canada, one reports that income as Canadian sourced. One has to keep track of how many days were physically in the US and physically in Canada to attribute the percentage allocation to each country. This rule was waived by the CRA for the 2020 tax year, and they might again for the 2021 tax year, but the long-term policy is still this way.
Jr. Member
Jun 29, 2010
133 posts
183 upvotes
Toronto
ugly wrote: I just have TN status. In normal times, I would cross daily.
kelaaa wrote: I know you mentioned further down for that you are were a commuter (now with Covid you are a remote employee for the time being) and I presume know the tax rules. But for the other people reading, that's is not how it works with the CRA to normally pay all US taxes for just being employed by a US based company. Normally when one is physically present in Canada, one reports that income as Canadian sourced. One has to keep track of how many days were physically in the US and physically in Canada to attribute the percentage allocation to each country. This rule was waived by the CRA for the 2020 tax year, and they might again for the 2021 tax year, but the long-term policy is still this way.
I was also on a TN visa (weekly commute for me), i'd start the count of days inclusively from the day i fly out of Pearson and back and save all my hotel receipts for proof.

Even before the waiver due to covid, i think it's still much more worth it to go with a US based salary - i am in finance so NYC is my main market and the salary differences between me and my US counter parts are more than double.

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