US Employer with Canadian Employee/subcontractor

[Abby Normal]

Anyone here have experience with a US business hiring a Canadian employee who will live and work in Canada? Should they be paid as a subcontractor? Would we still withhold taxes?

TIA!

[ILLMAS]

I believe the "employee" would have to submit a W-8BEN to employer, employer does not withhold any taxes or issues a 1099 at end of year (supposedly the person doesn't have a SS or ITIN), employee would be solely responsible to report it on his/her Canadian tax return.