I did a short contract with an entity in the US and am trying to figure out how they can pay me. I have a business and a Canadian business account.
Is there a recommended low risk/effort service I should use? I am in Ontario if that matters.
I’ve used e-transfer, PayPal, and Wise (formerly TransferWise) and they all work. I’m a bigger fan if wise since the conversion fees are the lowest.
You should not charge tax since its a US company and you don’t owe hst on that work (still need to for income tax though obviously).
Haven’t used a business account before so I can’t speak to the pros and cons of that approach
Have then do an international wire transfer into your bank account.
For bonus points, open a USD-denominated bank account at your local branch, and have the money wired in there. I prefer to leave the USD there until the exchange rate is more favourable, then transfer.
Also, if you have a particularly large sum ($25k-50k or more) you can usually call your local branch and ask for a ‘special quotation from the forex desk’ to get them to shave a few points off the exchange rate.
At first my plan was to open an actual account in the US, to transfer from. Opening an US account is a supreme pain in the ass though. It didn’t work out. Didn’t help that the guy at the friggin bank didn’t know what he was doing (what else is new), but I just ended up giving up because it was quite clearly going to be a pain.
I ended up opening a borderless chequings account at TD. It’s denominated in USD, and it’s fairly easy to wire into. You’ll need to know the swift code, and sometimes the whole branch, transit number (which they don’t have)/account number thing can sometimes trip the Americans up, especially if they don’t wire Canada that often, or deal with smaller regional banks. If that is causing issues for them at their facilities, what you can do is add an extra 0 to the financial institution code, and just have them combine them in the account number for the wire. For example 00010123411112222, with 0001 being the bank in this example, 01234 being the transit number in this example and 11112222 in this example being your account number.
Remember too, that a wire is going to hit you with $17-20 in fees every time, so find out what your fees will be for incoming wires, and negotiate that into your contract that they’ll cover that.
For conversion, definitely don’t use the bank unless you need that money this very instant. I used to use Knightsbridge, but they are slower than molasses (especially when it seems the trade is not in their favour), and you sometimes have to talk to people that are rushed and who don’t listen very good. I found that led to mistakes that you have to scramble to cover and fix when you got the confirmations, and one time I didn’t catch it and they almost overdrew my account.
Instead, I’ve been using Remitbee. It’s been giving me good conversion rates (often 40-50 basis points from midrate, which is comparable to what Knightsbridge takes, and is nowhere near comparable to the bank, who will take 250 basis points). It’s also pretty quick (usually 2-3 business days) and they just draw it out of the borderless account as an etf and put it back to my CAD chequings account. Being that it’s all online through their platform, you don’t need to trade with any humans, which mitigates the translation mistakes, and best of all it keeps the records of your trades, that will help you at tax time. So far l’ve been pretty happy with using them.
Also, just in case you aren’t aware, make sure you fill out a W-8BEN form and submit it to them. That way they don’t have to withhold tax.
I’ve been using Wise.com for these kind of things: their multi currency account allows you to get a US account number that your client can use to pay you with a standard ACH transfer, like they would pay an employee.
I’ve been using that with US and Euro zone clients for years and never had a problem.
I have worked in the US while living in Canada for more than 12 years. The first job I had in the US was a contract. I opened an account with RBC Bank in Atlanta and the company paid me into that account. I could then just transfer the money from my US funds account to my Canadian account. I have also worked for companies that used PEOs to employ Canadians. My current employer setup a Canadian subsidiary.
Thanks. It’s not a contract with regular payments, just a couple of one time payments, and there’s no formal employment agreement (just bulk services agreements), so a PEO doesn’t apply here.
Most of my friends living in the US will use Wise or Norbert’s Gambit to transfer their funds from the US to Canada because of the better exchange rate.