The fact that the UN salary is tax free is uttered so frequently by members of the public and friends of UN staff. You would think that once you retire that those questions will fade away. Never! They just keep coming.
The fact that UN salary is tax free emanates more from New York than anywhere else. Surprisingly, many UN staff themselves think that the UN salary is tax free. Even of greater surprise I have come across UN retirees who think that their UN salary was tax free. Do you recall the Staff assessment. Yes, that is it. Staff assessment was the tax that was taken from your gross salary to derive your net salary. At least for those working in the US and who did not pay taxes on UN salary, your staff assessment deductions went to a tax-equalization fund to fund the payment of taxes on UN staff who are taxed by their governments on UN salary. Any residue of this fund may have ended up as miscellaneous income to the UN and its agencies.
When you did not pay US taxes and staff assessment was taken from your salary, you did not get a tax deduction for mortgage, nor any personal allowances for yourself and dependents. If you took those deductions, perhaps you may have been financially better off. Never mind, at least you contributed to UN income.
If anyone tells you that your UN salary was tax free, ask them to read staff assessment.
What about when a dual (Canadian/US) citizen goes to the UN - as a Canadian? There is a staff assessment, but no tax. Now (six years later), the US wants to tax my UN income. Advice? Help!
Posted by: Steve Lonergan | June 08, 2011 at 08:11 PM