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Working remotely for a US company

omatthews

Star Member
Oct 18, 2020
65
26
You can work for US firms from Canada. I have been doing it. But remember that can only hire you as a contractor, if they don't have a local office/presence. DM me if you need any other info. Thanks,
Wondering if you can provide some insight into my situation. I am an American citizen awaiting my Canadian PR. I am currently residing in Canada but on a visitor basis right now (as I wait my PR). Currently I am still working for my US based company, but because I am merely visiting, I still have my US address on file. My boss and others in the company know that I am in Canada right now and "live here", however, I'm not sure that they are aware that once I get my PR it might complicate things. My question is, once I become a PR, will this be an issue for my employer once I switch my address to a Canadian address? The company is fully US and has no branches in Canada whatsoever. What are my options?
 
 

jclarke99

Hero Member
May 10, 2020
234
73
Officially, your company would then need to follow Canadian Labor laws (which can possibly be a can of worms).

Option 2 - You and your employer can make use of a Professional Employer Organization (PEO), who would essentially hire you, handle all the HR/labor matters and the PEO would hire you out to your employer. Of course, the PEO doesn't do this for free.

Option 3 - You work as an independent freelancer and invoice your company for work done. You need to be careful of being classified as a Personal Service Business (I recommend googling this) - which essentially means there could be unfavorable tax repercussions if you're only doing freelance work for a single company.

I can lead you to more info on any of these options. Just let me know.
 
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omatthews

Star Member
Oct 18, 2020
65
26
Officially, your company would then need to follow Canadian Labor laws (which can possibly be a can of worms).

Option 2 - You and your employer can make use of a Professional Employer Organization (PEO), who would essentially hire you, handle all the HR/labor matters and the PEO would hire you out to your employer. Of course, the PEO doesn't do this for free.

Option 3 - You work as an independent freelancer and invoice your company for work done. You need to be careful of being classified as a Personal Service Business (I recommend googling this) - which essentially means there could be unfavorable tax repercussions if you're only doing freelance work for a single company.

I can lead you to more info on any of these options. Just let me know.
Thank you so much for your response! This is all new to me, so that is super helpful. I'm thinking option 2 is probably the safest way to go in my case, as I don't think my company would be interested in option 1 and option 3 makes me nervous, as I would only be working for them. Do you happen to know how costly a PEO is? And they would be able to do cross border?
 

jclarke99

Hero Member
May 10, 2020
234
73
Yes, cross-border is big business for PEOs. I've seen costs thrown around online of $10k to $15k annually, but it wasn't clear whether those are simpler within Canada cases or more complex cross-border cases.

Here's a further description of what a PEO does...
"For a Canadian resident working for a U.S. company, here is how the PEO would work. The company enters into an agreement with the PEO to “lease” an employee. The PEO is the legal employer, responsible for payroll, benefits, employment standards, and other HR management functions while the U.S. company retains daily oversight of the employee (i.e., common law employer). This allows the company to hire the talent it needs and to manage the employer’s regulatory requirements at a reasonable cost with little disruption to the business."
 
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funloving

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Jun 19, 2010
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Thank you so much for your response! This is all new to me, so that is super helpful. I'm thinking option 2 is probably the safest way to go in my case, as I don't think my company would be interested in option 1 and option 3 makes me nervous, as I would only be working for them. Do you happen to know how costly a PEO is? And they would be able to do cross border?
We well explained by @jclarke99. In my opinion Option 3 is the safest one. Let them hire you as an independent consultant or freelancer. Option 1 & 2 are complicated. Why would they set up a hassle to have HR setup for just 1 employee. You know what I mean. If I were you I would just go with option 3. Thanks.
 
 

funloving

Hero Member
Jun 19, 2010
506
183
Category........
PNP
Passport Req..
08-10-2013
VISA ISSUED...
12-11-2013
LANDED..........
06-03-2014
We well explained by @jclarke99. In my opinion Option 3 is the safest one. Let them hire you as an independent consultant or freelancer. Option 1 & 2 are complicated. Why would they set up a hassle to have HR setup for just 1 employee. You know what I mean. If I were you I would just go with option 3. Thanks.
I meant very well explained by @jclarke99
 

stuthibalaji

Full Member
Sep 15, 2020
38
4
Hello everyone. I have been able to gather some information from the posts, but need more clarity on my situation. I will be moving to Canada and landing as a PR for the first time in March. I have a client in the US for whom I will be working as an Independent Contractor. Would I need to register as a Sole Proprietor before I can start working from Canada? If so, will that need a SIN? It takes a while to get it since I would need to quarantine for 15 days and then go to collect it. The client and I are hoping I can start as soon as I get there. Would this be a problem? Thanks in advance.
 

jclarke99

Hero Member
May 10, 2020
234
73
Perhaps someone else can address whether or not you need to wait for a SIN. Nevertheless, the following link should help with the ins and outs of working as an independent contractor.
https://diaryofatorontogirl.com/2019/03/18/canadian-income-taxes-freelancer/

I assume that you've read the rest of this thread and understand the potential issues of being classified as a Personal Service Business. Here's a link for more info.
https://dev.to/canosielabs/canadians-beware-the-personal-service-business-4kbk
 

stuthibalaji

Full Member
Sep 15, 2020
38
4
Perhaps someone else can address whether or not you need to wait for a SIN. Nevertheless, the following link should help with the ins and outs of working as an independent contractor.
https://diaryofatorontogirl.com/2019/03/18/canadian-income-taxes-freelancer/

I assume that you've read the rest of this thread and understand the potential issues of being classified as a Personal Service Business. Here's a link for more info.
https://dev.to/canosielabs/canadians-beware-the-personal-service-business-4kbk
Yes, thank you!
 
 

mmadhumitha

Newbie
Oct 25, 2019
8
2
Hi everyone, I have a couple of questions:

I am currently working for a company in US on H1b visa (I still have 2 years left on my visa) and I have a PR in Canada. I am planing on moving to Canada and working for my current company from Canada. I have been getting confused with the various options I see online.
1. Can I continue with my US employment (getting paid in USD) while residing in Canada (pay taxes based on the Canada-Us tax treaty)?
2. Should I set myself up as an independent contractor in Canada and work for the company in US? (Since I would just be working for only one single company, I am not sure if I would be penalized by CRA if they consider me as a PEO)
3. Should I set myself up as a numbered company and then bill my employer in US? Again, I am not sure if this would cause a PEO issue as well.

Thanks in advance. I would really appreciate any information I can get as I am very confused with this process.
 

jclarke99

Hero Member
May 10, 2020
234
73
Hi everyone, I have a couple of questions:

I am currently working for a company in US on H1b visa (I still have 2 years left on my visa) and I have a PR in Canada. I am planing on moving to Canada and working for my current company from Canada. I have been getting confused with the various options I see online.
1. Can I continue with my US employment (getting paid in USD) while residing in Canada (pay taxes based on the Canada-Us tax treaty)?
2. Should I set myself up as an independent contractor in Canada and work for the company in US? (Since I would just be working for only one single company, I am not sure if I would be penalized by CRA if they consider me as a PEO)
3. Should I set myself up as a numbered company and then bill my employer in US? Again, I am not sure if this would cause a PEO issue as well.

Thanks in advance. I would really appreciate any information I can get as I am very confused with this process.
When you mention PEO, I think you meant PSB (Personal Service Business) - where CRA can tax you heavily if YOU claim yourself as an independent contractor, but act as if you're a full-time employee of a single company.

You don't mention a 4th option, which is PEO (Professional Employer Organization). This is the safest option if your employer is open to this. You'd be hired by a Canadian PEO and lease you out to your U.S. company (of course at some cost that your employer would need to pay to the PEO). With this option, your employer wouldn't have to concern themselves with Canadian labor laws (an issue for your option #1), and CRA is kept "happy" because payroll and benefits are all maintained in Canada (also an issue with option #1).
 

mmadhumitha

Newbie
Oct 25, 2019
8
2
Yes, sorry I meant PSB. Unfortunately, going with a PEO is not an option for me as my employer would not be comfortable having another person or a company in the middle. Do you know if option 3 is a viable option?
 

jclarke99

Hero Member
May 10, 2020
234
73
Thank you so much for your response! This is all new to me, so that is super helpful. I'm thinking option 2 is probably the safest way to go in my case, as I don't think my company would be interested in option 1 and option 3 makes me nervous, as I would only be working for them. Do you happen to know how costly a PEO is? And they would be able to do cross border?
I am not a professional in this area. I just know from what I've found online. My impression is that it doesn't make a difference if you are incorporated or not. It may even be more suspicious to CRA if you are incorporated and don't have any employees, don't advertise for business, don't have multiple clients, etc. Here's a different link, from what I've posted previously in this thread, about the drawbacks of being declared a Personal Service Business...
https://www.thebalancesmb.com/costs-of-declaring-a-personal-service-corp-2948621
 
 

chaossaver

Newbie
Mar 17, 2018
7
0
I just found this thread, hopefully someone can shed some light for me. Thank you all in advance!

I am in a similar situation, a US small company wants to hire me working remotely for them. I did some research and pointed them to the PEO at first, but they most likely did not want to pay for the cost. So their argument is this: using PEO is essentially signing a service contract between them and PEO, and PEO signs an employment with me. So why not cut the middleman. They ask me to incorporate an company, and I hire myself and pay myself. So they just pay me and I handle all the Canadian taxes and regulations myself (maybe with a help of CPA)

My understanding from the embedded link of the "Personal Service Business" is that clearly my set-up would be a PSB. Even so, if I as a PSB company pay out all the earning as employee salary, the cooperate tax will be all deducted, I as a employee pay personal income tax. So from the tax perspective they are the same for me, I will pay personal income tax for both cases, but I am able to be hired by this US company if I incorporate as a company

I don't know if my understanding is correctly. And are there any other complications maybe I did not see? Thank you!
 

jclarke99

Hero Member
May 10, 2020
234
73
Why incorporate? Why not just be a freelancer without incorporating? This is a very informal link, but has some potentially helpful info https://diaryofatorontogirl.com/canadian-income-taxes-freelancer/

I also don't understand why you'd be "able to be hired by this US company if I incorporate as a company". Really? Perhaps it's just semantics, but seems like you'd be a freelancer (rather than hired by the US company) and you'd invoice them, and they'd pay you (but not as an employee).