Payments to foreign nationals are complicated due to immigration and tax laws.
As a general rule, Hamilton must pay 30% in US federal taxes on payments to foreign nationals for services performed in the US.
When submitting a check request for a payment to a foreign national, please indicate if Hamilton agrees to pay the tax on the individual's behalf or if the 30% US federal tax is to be withheld from the individual's payment. For example:
If Hamilton pays the US federal tax on a $500 payment to a foreign national, the check request would be prepared as follows:
| 13 Digit Acct. No | Amount | |
|---|---|---|
| xx-x-xxxxxx-xxxx | $ 714.29 | Amount charged to department including federal tax withheld. |
| To calculate, divide the desired payment amount by 70% | ||
| 10-0-000001-2130 | ($ 214.29) | Federal taxes withheld 30% |
| Total | $ 500.00 | Net amount paid to foreign national |
If the US federal tax is withheld from the foreign national's payment, the check request would be prepared as follows:
| 13 Digit Acct. No | Amount | |
|---|---|---|
| xx-x-xxxxxx-xxxx | $ 500.00 | Amount charged to department |
| 10-0-000001-2130 | ($ 150.00) | Federal taxes withheld 30% |
| Total | $ 350.00 | Net amount paid to foreign national |
Immigration law addresses whether it is legal to make a payment to a foreign national for services performed within the US. This determination is based on visa classification and type of payment involved. Refer to the matrix below for guidance.
Visa Status |
Sponsoring Institution Is: |
Honoraria |
Fee for
|
Living
|
Wages |
|
Alien Registration/ Green Card |
N/A: sponsor nor required | Yes | Yes | Yes | Yes |
| B-1/B2 |
N/A: sponsor not required |
Yes: individual must sign a statement attesting that his visit at Hamilton will not exceed 9 days and he/she has not received more than 5 honoraria in last 6 months. |
No |
No |
No |
| F-1 | Hamilton | Yes | Yes | Yes | Yes |
| F-1 | Not Hamilton | No | No | No | No |
| H-1 | Hamilton | Yes | Yes | Yes | Yes |
| H-1 |
Not Hamilton |
No | No | No | No |
| J-1 | Hamilton | Yes | Yes | Yes | Yes |
| J-1 | Not Hamilton |
Yes: requires a letter of authorization from the institution that sponsored the J-1. |
No | No | No |
|
TN (Canada, Mexico) |
Hamilton | Yes | Yes | Yes | Yes |
|
TN (Canada Mexico) |
Not Hamilton | No | No | No | No |
| WT/WB |
NA: sponsor not required |
Yes: See requirements under B-1/B-2 | No | No | No |
| Other Visas | Contact Erika Mumford x-4376 prior to making any agreements. | ||||
