Update June 26, 2020: People affected by Trump’s H1B travel ban may continue working from home countries like Indian, China, or Canada as long as their US employer allows it.
Normally, US employers will not run US payroll for an extended period of time. Talk to your employer to see if they can pay you outside the US instead of firing you.
You can also contact a consulting company and get payment in India while they collect your salary from the US employer for consulting services.
For example, most IT consulting companies like TCS or Infosys would start your Indian payroll as soon as you exit the USA.
This article will discuss:
Working From India on US payroll
Working from India on US payroll is not allowed unless you have some US work visas like H1B or L1 and for a short duration of 1 to 5 months.
Many people who exhaust their H1B 6-year quota leave the USA. They wait outside the USA for their H1B extension result and work remotely as an IT worker from their country.
The most important point to note here is when you leave the USA, US immigration law does not apply to you.
You have to abide by the work visa rules of the country that you are currently working from.
If you are an Indian citizen and have left the USA, you can work for any employer in India. It does not matter if it is a US-based employer or an Indian company.
You can work from India and get US salary as long your US employer can legally pay you a salary in the USA account.
If you are stuck in India, Canada, or Mexico due to US visa form 221g delays, you can work remotely for a short term up to 5 months.
There is no legal rule defined for the number of months. We have suggested 5 months based on US taxation.
Ideally, you should try to change your US payroll to your home country payroll if you have to stay outside the US for longer than 2 months.
Your employer should be informed about this remote work.
If you do not get paid in the US, there is no question of deducting SSN and medicare taxes.
If you do get paid in your US account in dollars, then you are liable to pay SSN and Medicare taxes along with federal and state taxes.
You will also need to file a US tax return at the end of the financial year.
You can work remotely from India if you are outside the USA waiting for your US visa as long as your employer is fine with it.
For example, In the case of the Coronavirus pandemic, the US embassy had cancelled all visa appointments and many people were stuck in India.
They were able to work from India.
Maintain Canada PR, Get US Salary on H1B?
If you want to stay in Canada to maintain your PR and still want to keep working for your US H1B employer and draw US salary in US bank account, then it is not legally possible with US immigration law.
Your employer needs to show you as an employee who will be working physically in the US to sponsor your H1B.
You can work remotely but as soon as you enter Canada, you lose your H1B status. Your visa status in the US is defined by your i94.
In this case, your US employer can still hire you but will have to find a way to pay for your services without using your H1B. Usually, it can be done by showing you as a remote consultant. Employer can then show the salary payments to you as business expenses.
You can also keep visiting USA using your H1B visa but then it may be hectic. Many people do enter USA from Detroit on H1B and then stay in Canada. This is probably the best way to get best of both world.
Similar situation may arise for people who are thinking of going to Australia and still maintain their H1B visa. The answer remains same.
Salary in USA, Working in India
Legally, if you are not in the USA on a valid work permit like H1B, your company cannot show you as an employee in their accounting books and cannot pay you a salary in US dollars.
Your US employer should pay you through a contracting company in India. Legally, your employer can hire a contracting company who can then get work done from India.
You can receive your salary through this contracting middle vendor.
If you have completed your H1B 6 years quota, your employer cannot show you as a legal employee. You must leave the USA and wait for your H1B extension (if filed with pending PERM) result outside the USA.
You can work remotely and can get paid by a third party employer who may contract with your US employer.
US Tax – Working from India?
The US taxation will come into the picture based on your stay in the USA in the relevant financial year. If you pass the substantial presence test from IRS, then, yes, you will have to pay US tax for that year.
If you worked in the USA from 1 Jan 2019 to 31 July 2019 and then left to work from India, you will pass the substantial presence test. You should file US Income tax return and show Indian income too from Jan 2019 to Dec 2019.
Salary Using SSN, Working from India
I strongly recommend to NOT receive any payment on your SSN while you are working from India.
If the salary is received for short term like 1 to 5 months, then you are fine. But, if you keep receiving a salary for more than 6 months, you will face taxation issues.
You would be considered working in the USA without any valid work authorization if you receive payment on your SSN from US company.
This may or may not be tracked by USCIS but it is best to avoid.
Working From India on Holiday
Working remotely from India is allowed if you are traveling to India on vacation or short business trips. You can also receive your salary in USD while you are away on your vacation.
Usually, people will take PTO (Paid Time Off) from their H1B US employer and then travel.
H1B International Assignment
Working for a US company from Europe, Canada, UK, India does not count as your H1B time when you go for a project that spans more than 6 weeks.
Once you leave the US, H1B is out of the picture completely unless you left for a short duration like 1 to 6 weeks.
If you plan to work outside the USA for more than 6 weeks, it is best to take your H4 and L2 dependents too with you.