Minimum 12.5% Pay Cut for USAB

[Apple Tree Yard]

A little recognised problem is inherent in the new deal for those based with USAB. Once the company establishes USAB as a US based company (as opposed to a HK based company presently), the employee will be responsible for paying the 12.5% FICA tax (deducted by CX and paid to the US Gov directly). At the moment this is not paid, so upon this change of basing jurisdiction, takehome pay will see a reduction of this amount. Comments?

[Kitsune]

ATY, compared to the social taxes etc that based personnel in EU jurisdictions such as FRA will have automatically deducted from their salaries, I can assure you that 12.5% is a definite WIN!!!:eek::eek::eek::eek::eek:

[BusyB]

UK also will have National insurance (11-12%) deducted from the individual when they go onshore.:sad:

[Sqwak7700]

One of the benefits for pilots if Cathay goes "on-shore", is the right to Unionize in the USA. That will be a huge loss for the company when they can't just fire you and you can start getting all sorts of benefits like enjoying calling in sick when you're morale prevents you from safely completing your job. The US guys should be looking forward to this...

Cathay hasn't really enjoyed the benefits of having a US Union on the property. :O

[Numero Crunchero]

I am curious as to how you got that figure. I know you have to co contribute 6.2% up to $97,500US for FICA. I know that you have to co-contribute 1.45% on entire salary for Medicare Levy .
If my understanding is correct you will pay 7.65% up to $97.5K and then 1.45% above that. CX US(onshore company) would be responsible for the the same amount as well. So yes that is a total of 15.3% but both employer and employee pay half. Right?

So just wondering what I am missing here?


Busy B
NIC rates I thought would affect UK freighter pilots around 7% for FOs and just under 5% for CNs. For B pax it would be 5.7% for FOs and 4.4% for CNs. In order to have NO net loss from paying NIC, you need to increase salaries by; for freighters 7.4% for CNs, 12% for FOs; for pax 6.4% for CNs and 9.4% for FOs.
Do you get these sorts of figures mate?
cheers

[Apple Tree Yard]

Numero. Thanks for the clarification. I was only relating a comment I heard from another US pilot. Your figures are of course correct. Still, it amounts to a pay cut from the present 'take home' pay that USAB pilots realise.

[Numero Crunchero]

No insult or sarcasm intended. I only have a rudimentary knowledge of the US tax system. My understanding is that currently neither you nor USAB pay anything but that would change with onshoring. The question is, since most US airlines have medical coverage after retirement, will onshoring cause CX to offer comparable coverage?

[Apple Tree Yard]

An interesting question that you raise. If they are intending on hiring hundreds of US pilots...then they will have to offer competetive benefits. Needless to say, retirement health insurance is a must in the US....notwithstanding Nicks rather insulting and dismissive comments about the issue in Crews News. Without a proper answer to this issue, CX will lose as many US pilots as it manages to hire....

[Westcoastcapt]

If CX wants to go "onshore", let them. The last thing they want is to be subject to the respective labour laws of local jurisdictions. Just wait to those new Dads ask for their 6 months paternity leave. Or better yet, imagine trying to offer a take it or be fired COS in Canada, especially now in BC. The Supreme Court here recently shot that down in reference to the HEU contracts a few years ago. Moreover, I'm rather certain that an employer is bound to meet their obligations in respect to the various taxes and levies and are not allowed to pass them on to the employee.
A quick call to your local government agency will clear that up.

[BusyB]

NC.
I just hit the government website again and unless I've misunderstood (always possible) our provident fund payments it looks to be up to 10.4% max.:confused:

[ASH1111]

Bump......

[water check]

NC what are the major tax implications going onshore ?

[Tornado Ali]

NC what are the major tax implications going onshore ?

[Numero Crunchero]

I only know the basics of the US situation - enough knowledge to be dangerous;-) You will need to ask someone who actually understands the US implications.

What I can say is that I know that in the US many are based in one country living in another. I suspect this practice would be severely curtailed with onshoring - IRS might check who has residency, paying tax, who has a green card etc. Similar things will happen in EUR - so onshoring has its costs as well as its benefits.

Presumably an onshore company will have to conform with all local requirements. For example, in Australia long service leave will accrue (unfortunately not back dated;-). So look around at what are contractual rights as opposed to employment benefits. If it is an inalienable right to strike, have paternity leave etc then being in an onshore company should bestow those same rights. However, read carefully what you sign as you may waive your right to many benefits other US company employee's enjoy.