what is hypo tax?

Question

when working outside of the US a hypo tax is express in your salary.

Answer 1

Many corporations have developed the policy of “Hypo Tax” or “Tax Equalization” in order to protect their expatriate employees from the financial impact of transferring to countries with different tax rates from those in the home country.

Answer 2

Hypo Tax

Answer 3

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RE:
what is hypo tax?
when working outside of the US a hypo tax is express in your salary.

Answer 4

Hi.

I work for Expatriate tax for a big 4 firm and we do hypothetical tax calculations. What happens is - when you go abroad, your actual tax withholding will stop and your hypothetical tax withholding will start. Actual withholding is paid to the US gov't, however, hypo is not. This hypothetical tax is used for your Tax Equalization Calculation.

This calculation will show what you actually paid while on assignment ( Actual withholding AND hypo withholding) and what you would have paid had you not gone on assignment.

Feel free to email me if you have any more questions.

Answer 5

Hypo is short for hypothetical. Used to figure what the tax would be so that you are made equal, irregardless of where you are working.

Answer 6

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US based income is taxable, in your case you probably also file W-8BEN with your 1040NR

Answer 7

what happen to the money taken out of your pay. working in Canada for a year and they have taken about 40.000 out of my pay. were is the money paid to.