Introduction
This document is unofficial and not endorsed by my school or employers.
We’re not lawyers, tax specialists nor do we purport to have any real knowledge.
This is a collection of things we wished someone told us when we went away for fulltime opportunities in the US. We hope it helps you out. Many things contained in this document were gained through mistakes and conversations with older students.
Contributors
Getting the Job
Applying to Jobs
If you’re a graduating co-op student, attending Waterloo or elsewhere, you already know how this works, for the most part. Here are a few quick resource refreshers for finding awesome companies to work at.
- AngelList - AngelList has a wealth of early to late-stage (well-funded) startups that are always looking for talent. Post a talent profile and search for that full-time job.
- LinkedIn Premium - LinkedIn itself already has some great tools; adding a premium search functionality to that experience can only enhance your search.
Note that even as a co-op student, it can take a while (up to a few months) to find a full-time position if you end up not returning to a previous employer, for whatever reason. Keep applying, keep learning, keep trying - persistence and confidence is key. You will find a job in time - everyone does, in some way or another. And when the offers start to come in, try to keep things in perspective. Yes, choosing your first full-time job is an important decision, but it is not forever. Think of it as a step towards building your career.
General tips & advice:
- Unlike your previous co-op experiences, your employers (outside of JobMine) don’t look at your grades or previous co-op evaluations. If your resume is solid, you will likely get a shot for an interview.
- Since the above point should be further emphasized: Interview performance is the key deciding factor
- Getting an interview will be different than JobMine; generally, you respond directly to the recruiter, and you schedule everything well in advance.
- Most interviews for companies outside of your home city will be phone or voice (Skype, GVoice, etc) interviews. If it’s for a technical position, be prepared to code.
Negotiation
Always negotiate. For many of us it’s hard to negotiate because the offers are often quite lucrative. It can seem like more than we deserve. But if you don’t negotiate you can be leaving a lot of money on the table).
If having more money to save for a house or family isn’t enough of a motivator, there are other reasons to negotiate.
Part of the problem with negotiating a salary is the information imbalance. Recruiters know the going rate for a Software Engineer from Waterloo. So ask your friends and classmates from upper years to share their offer details if they are comfortable. We tend to treat salary as taboo. This makes sense most of the time, but for our first full-time job we are all in generally the same boat. So don’t be afraid to ask a friend, they will often be happy to help.
Recruiters are really good at negotiation and scaring people into accepting. Stephen has had friends that just took the first offer given over the phone and friends who have given into the pressure of an ‘exploding offer.’ Joel Spolsky of StackOverflow fame has written a nice article on exploding offers.
Turns out, that while the recruiter may pressure you with a deadline, they will happily extend it. If the company decided to make you an offer, they are probably pretty serious about trying to hire you. They’ll let you take a few weeks if you give them a good reason. Stephen’s friends pushed back return offers for over 3 months.
The easiest way to negotiate is to have other competing offers. Once you get the details of a company’s offer, tell them what the other companies have offered you. Don’t lie, often they will ask you to forward the offer letter for verification.
Many recruiters get a bonus or have their bonus tied to the number of new hires they sign. This means that they are somewhat on your side when it comes to making you happy. However, they are handling a lot of other candidates so don’t waste their time. Be direct and clear with what you want. Don’t make them guess. And be polite, obviously.
When it gets towards the end of the negotiation, and you know which company you prefer, let the recruiter know that you will sign today if x number is y (20,000 RSUs).
Some numbers are harder to negotiate than others. At least in 2014, salary was hard to negotiate for a lot of the larger companies for many people. The easiest to change seemed to be signing bonus, equity, and relocation bonus.
Some benefits to consider:
- 401k
- Signing bonus
- Relocation bonus
- Annual bonuses (mostly large companies)
- Vacation time
Some resources other resources about negotiation:
- Getting To Yes: This book doesn’t cover employment negotiation specifically, but negotiation in general. This book is especially helpful for those who don’t wish to negotiate like a used car salesperson.
Stock Options
These can be really tricky. Stock options are not the same as RSUs / GSUs.
Resources:
- The Open Guide to Equity Compensation
- Consider Your Options Book
- An Introduction to Stock & OptionsScribd PDF
- When to Exercise Stock Options
401k
If you may ever return to Canada later in life, you should checkout this stuff.
- Strategies for Canadians with U.S. retirement plans by Sun Life Financial [PDF]
- 401(k)s: What if I need the money before I retire?
- Transferring your 401K to an RRSP
Visa
General Resources:
TN
If you are a Canadian citizen, your employer will likely set you up with a TN visa. This is a pretty easy process. You will apply at the border so leave some extra time (15 minutes for the actual application and an hour for the extra wait). Stephen knows someone who missed their flight due to the wait for secondary.
If you are crossing by land, Stephen knows someone who couldn’t get their TN simply because the guard who processes TNs wasn’t there. Not sure if this is common, but something to look into.
Resources:
H1-B
A common visa for non-Canadians. Only 65,000 per year are given out every year, with an extra 20,000 cap being extended to people with Master’s degrees or higher. The application process begins in April of every year, and is basically a lottery system. Anyone who is reapplying from the previous year has the same chance of obtaining their H1-B as a new applicant. More details can be found on the USCIS website.
Credit
CreditKarma and NerdWallet are your friends once you have established some form of credit.
Canada - US Taxes
This section covers Graham’s interpretation of tax law as it stands in 2017. Make sure to confirm for yourself that the statements made are true, apply to you, and haven’t changes since the time of writing.
Change of Residency
If you move to the states for work and no longer have residential ties (a house, spouse, or dependants), you will probably be considered a non-resident and an emigrant by Canada. You will owe Canada taxes on your global income before the date you became a non-resident, and you will owe taxes on only your Canadian income after you become a non-resident. You will want to give this page a thorough read before declaring yourself a non-resident.
Savings Accounts
RRSPs
The IRS recognizes the tax-deferred status of Canadian RRSPs, so they will continue to be tax sheltered after you move (you will, however, have to disclose your account and it’s value to the IRS). You may continue to contribute to your RRSP after your become a non resident, however, you will generally not accrue any more room from your American employment.
TFSAs
As of 2017, the IRS does not recognize the tax defered status of TFSAs so you will be taxed on any income in your TFSA (source). Additionally, you can not contribute to your TFSA once you become a non-resident (if you do, you will be taxed at 1% a month by the Canadian Government)
Retirement
It’s never too early to plan your retirement or plan your future finances! Note that the numbers in this section change almost every year. Refer directly to the IRS website for the most up to date numbers.
401(k) vs. IRA
A 401(k) is an employer-sponsored retirement plan that allows you to contribute a % of your income to some account managed automatically by a financial company like Vanguard. The money is automatically deducted from your paychecks. The yearly contribution limit changes, but was $18,000 as of 2017 (up to date numbers available from the IRS). One thing to note is that if your employer offers any 401(k) matching, you should definitely sign up for it ASAP, it’s free money.
An IRA is an individually managed retirement account, usually through the same financial companies that would manage your 401(k). It is useful for individuals working at companies that might not have a 401(k) plan, like in many startups. The major disadvantages of contributing through an IRA is that you need to personally manage it more closely than a 401(k) and the contribution limit is $5,500 as of 2017 (up to date numbers available from the IRS), which is significantly lower than a 401(k).
Traditional 401(k)/IRA vs. Roth 401(k)/IRA
A Traditional 401(k)/IRA is contributed to pre-tax and you are taxed on withdrawl, while Roth 401(k)/IRA is contributed to post-tax but is tax free on withdrawl. Basically, do you wanted to pay taxes later or pay taxes now.
It is important to note that both types of plans are usually better than a standard, non-tax sheltered account. Which one you choose will often be dictated by contribution and deductions limits. For examble, in 2016, contributions to Traditional IRAs are not tax deductable (i.e. they are no longer considered pre-tax contributions, and you might as well be putting your money into a non-tax sheltered account) if you had an employee sponsored 401k and earned over $71,000 as a Single filer. This would mean you’re better off putting your money in a Roth IRA, since you will at least be able to benefit from the tax savings when you withdraw your money.
Assuming you aren’t encumbered by contribution or deduction limits outlined above, you will have to choose whether a Traditional or Roth account makes more sense for you. It’s encouraged that you do your own calculations, but here are some possible reasons you might pick either Traditional or Roth.
Roth:
- You expect to make more money later in your career and accordingly pay more taxes.
- You expect that the general tax rates will go up in the future.
- You’re temporarily paying less taxes because you’re not working (if your visa allows it) or working at an early-stage startup.
- You plan on marrying someone with more money.
Traditional:
- You’re making more money than you’d expect to in the future. I.e. if you plan on quitting to join an early-stage startup.
- You expect tax rates to go down in the future.
- You plan on marrying someone with less money.
It’s also important to note that, as of 2017, Roth IRA contribution limits are reduced for singles earning over $118,000 or maried couples earning over $186,000 (up to date numbers available from the IRS). As of 2017, there is a “backdoor” method that still allows those earning over the limit to contribute to a Roth IRA.