Working remotely tax obligations

[hardy07]

Hi. I am working remotely out of Canada for a Canadian employer since October 2020. I learned that there will be tax obligations if I will be considered a non resident for tax purposes in Canada. My concern is, my employer doesn’t know that I’m working remotely and I want to avoid that from happening.

Q1. Will I be considered a non resident for tax purposes only if for year 2021 I didn’t live in Canada for at least 183 days?

Q2. I learned that if someone is a non resident of Canada for tax purposes (if answer to Q1 is true), he has to pay additional taxes. These additional tax will be applied to:
a) Earned income from Canadian employer. This I can pay to cra without employer’s interference. So no worries.
b) CPP and other such benefits. For this I need to inform my employer so they can withhold 25% taxes and pay to cra. This is my worry. Is there anyway I can do this myself without employer’s interference?

Please guide me on this. Should I come back to Canada asap so that for year 2021, I am there for more than 183 days and avoid any problem? Or can I still be away working remotely and avoid my employer to know that.

I know and understand that I will be advised that I should have been transparent to employer and all. But not everyone living in Canada is in same situation. Some like me have no family, no relatives, not many friends and not able to go office or anywhere out is mentally very overwhelming and can affect mental peace and health. I want to pay every penny of tax I am liable to. My concern is just to not let my employer know that I am or was working remotely.

Any advice to help me will be greatly appreciated.

 

[canuck78]

Hi. I am working remotely out of Canada for a Canadian employer since October 2020. I learned that there will be tax obligations if I will be considered a non resident for tax purposes in Canada. My concern is, my employer doesn’t know that I’m working remotely and I want to avoid that from happening.

Q1. Will I be considered a non resident for tax purposes only if for year 2021 I didn’t live in Canada for at least 183 days?

Q2. I learned that if someone is a non resident of Canada for tax purposes (if answer to Q1 is true), he has to pay additional taxes. These additional tax will be applied to:
a) Earned income from Canadian employer. This I can pay to cra without employer’s interference. So no worries.
b) CPP and other such benefits. For this I need to inform my employer so they can withhold 25% taxes and pay to cra. This is my worry. Is there anyway I can do this myself without employer’s interference?

Please guide me on this. Should I come back to Canada asap so that for year 2021, I am there for more than 183 days and avoid any problem? Or can I still be away working remotely and avoid my employer to know that.

I know and understand that I will be advised that I should have been transparent to employer and all. But not everyone living in Canada is in same situation. Some like me have no family, no relatives, not many friends and not able to go office or anywhere out is mentally very overwhelming and can affect mental peace and health. I want to pay every penny of tax I am liable to. My concern is just to not let my employer know that I am or was working remotely.

Any advice to help me will be greatly appreciated.

You first need to contact CRA and determine if you are a tax resident or not. Being outside Canada doesn’t mean you aren’t a tax resident. It all depends on your ties to Canada. Only CRA can determine that. The fact that your employer doesn’t know you aren’t in Canada actually is causing you more problems and you are losing money if you are actually a non resident for tax purposes. Your employer is taking out deductions as if you were a tax resident. You really need to speak to CRA first and then speak to your employer about your residency status. If you are wanting to work remotely you should be discussing whether that is an option. Would add that you also need to advise your pronvincial health plan if you are outside Canada for a long period of time. Even if you have a valid health card you may no longer qualify for free healthcare depending on the amount of time outside of Canada.