IT contracting in the USA: an overview

Contracting in the USA can prove challenging for non-domestic citizens as a result of the tough nature of the country’s immigration services and visa regulations, writes John Smith, managing director of the Americas at CXC Global.


The main factor to keep in mind is that any non-American contractor will have to be sponsored by the company utilising their services. There’s no way around this and without sponsorship, UK-based professionals in IT or any other industry will have no chance of working in the USA.


On top of sponsorship, UK IT contractors must then look to secure a H1B visa which allows them to work in the country. However, this is no easy task. The H1B application window to apply runs for between 10-14 days from the 1st April and any applications not made in this time frame will have to wait for another year if the process closes early.

Will you be in the 10%?

There’s also, unsurprisingly, huge demand to work in the US and for most UK-based professionals we’d estimate that there’s really only a 10% chance of them being approved and given a visa. And for those British techies who may have credit issues, or possess a criminal record, we’d advise that they shouldn’t even begin the process as their application is highly likely to be rejected.

Tourist visas; tax and transfers

For those UK professionals wanting to visit the country before applying for an IT role, they can do so on a 90-day tourist visa, however attending interviews or working in any form during this timeframe is strictly prohibited.

Also keep in mind that the American tax system is starkly different to that in the UK. Anyone working in the country is recognised as an employee of the company they’re providing services for and has to pay federal, state and even city taxes in some locations. This generally equates to around 18% of earnings, but the precise rate will vary depending on how much is being earned and which city and state the work is being performed in. While federal taxes remain the same, state and city charges will vary from place to place.

One potential option for working in the country is utilising an inter-company transfer visa. However, to qualify for this you must be registered as a PAYE employee in the UK for a consecutive year and must be working for an employer with offices in the USA. This relationship will be heavily scrutinised, along with the rest of an application, so this isn’t necessarily the easy route into the country but it is a viable one.

Editor's Note: Related Reading -

Contractors' Questions: How to be tax-efficient when IT contracting in the US?

Contractors' Questions: How to start contracting in the USA?

Contractors' Questions: Is contracting in the US VAT-free?

Contractors' Questions: How to manage US income?

Contractors' Questions: Will a month's extension for the US be taxing?

Contractors' Questions: Can I get my fee from a US client in pounds?

Contractors' Questions: What If I'm supplying a US firm from the UK?

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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