Author Topic: Canadian earning US income from US company  (Read 2013 times)

Danor71

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Canadian earning US income from US company
« on: January 17, 2020, 03:58:44 PM »
I am a Canadian resident working for a Canadian company with a US sister company.

I split my time 2/3 Canadian and 1/3 US.   The company has asked if I should be being paid directly from the US company.  Assuming a $100k Cad annual income, that would mean $66k Canadian and $25k US income.

What arevthe implications of such a setup?  I know I would pay Canadian taxes on the full $100k and get a credit for whatever I pay in the US.  Are there other considerations?

One that comes to mind is the RRSP matching that I would sacrifice in the US portion
What else should I be worried about?

Thanks for any input.

K-ice

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Re: Canadian earning US income from US company
« Reply #1 on: February 03, 2020, 09:41:27 PM »
I am not sure about the RRSP matching or contribution limit. I would think the contribution limit would still be 18% of the equivalent in CAD so $18K but I'm not sure.  It could be just 18% of $66K so only $12K

Speaking of RRSP, one advantage might be to keep the US cash and use it to buy VTI directly in your RRSP. I have heard that is a very tax efficient place to locate the US equities portion of your asset allocation. You wouldn't even need to convert money to do so.

I had a bit of US cash and contributed it to my RRSP last year and bought VTI. I just downloaded the Tax contribution receipt and it was the equivalent in CAD.

Seamless, one day when I retire this will be my US holiday money.