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For a permanent employee position, I received an offer letter from an Employer.

This is my first job in Canada.

Offer letter mentions,

Annual base salary as 1234 CAD subject to statutory deductions and payable in accordance with the Company’s usual payroll practices in force from time to time.

Restricted stock units as 66 USD

Back in India, we had hra component as well. Hra - house rent allowance

If I switch to another company, then the new compensation will be based on current compensation 1234 CAD + 66 USD or just 1234 CAD

Question

1) Is annual base salary the final amount?

2) What is restricted stock unit?

  • 1
    The annual base salary is before taxes, the amount going into your bank account will be considerably less. The line about RSUs is quite meaningless, though. The company is apparently paying part of your compensation in company stock, there should be a number of shares and a vesting schedule somewhere. That income will be taxable at the market value of the shares when they vest. If the stock is publicly traded you can't know how much income that will be beforehand (if the company is private the price is a fiction and shouldn't be counted on to put cash in your account). – Dennis Feb 12 '17 at 14:56
  • @Dennis; looks like an answer to me; if you'll add it, I'll upvote. – Giorgio Feb 12 '17 at 17:29
  • Note: In the US, and I expect Canada too, although companies will try their best to get you to reveal your current salary, you don't have to. – mkennedy Feb 12 '17 at 18:52
  • @mkennedy yes they asked me but I did not reveal – overexchange Feb 12 '17 at 20:08
  • @mkennedy Am realising that Canadian job market has less salaries compared to US market. IT market. What is your observation? – overexchange Feb 13 '17 at 7:03
2

1) Is annual base salary the final amount?

The annual base salary is pretty much what Dennis explained in his comment. The salary you will get will have CPP, EI (differs from province to province) deducted from it and so it will be considerably less than if you divide your annual salary by 12 months. Keep in mind that there are high tax rates in Canada and also the taxes differ from province to province. This website provides some numbers which are deducted yearly from your annual salary.

I use this website to check what my biweekly pay check would come down to. Its pretty accurate (to the cent in my case). This will help you to calculate what your take home salary will be.

2) What is restricted stock unit?

Again pretty much what Dennis said in his comment. RSUs basically means that the company will issue the stocks at some future vesting date. (This date may or may not be known depending on the company). RSUs are taxable when the value of the stock is declared which means you don't have to pay tax on RSUs if they are not declared in some specific taxable year. Also quoting Dennis:

That income will be taxable at the market value of the shares when they vest. If the stock
is publicly traded you can't know how much income that will be beforehand (if the company
is private the price is a fiction and shouldn't be counted on to put cash in your account)
  • 1
    Also as a side note, I would like to say that the whole Stack Exchange follows a community model and is dependent on users contribution. Therefore you should accept answers on your old questions so that it helps future visitors of the site and grow this small community on Expatriates.SE. – Dipen Shah Feb 13 '17 at 13:39

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