Moving from Toronto to San Francisco: Taxes, RRSP, and RSUs

Toronto to San Francisco is the Bay Street-to-Bay-Area pipeline: Shopify, the banks’ technology divisions, and a cluster of Toronto fintech startups all feed engineers, product managers, and data scientists into FAANG and the wider Silicon Valley employer base. Ontario’s combined top rate runs around 53.53%. California’s runs around 50.3%. That’s close enough that this move is a lateral shift, not a tax cut, and the real gap isn’t the top bracket. It’s what California does to an RRSP every year, and how it sources an RSU grant that started vesting while you were still sitting in a Toronto office.

Why does Ontario’s rate look so close to California’s?

Because both systems stack a second layer on a graduated base, just built differently. Ontario’s five brackets top out at 13.16%, then a surtax adds 20% of basic Ontario tax above roughly $4,991 and another 36% above roughly $6,387 of basic tax, pushing the effective top provincial rate closer to 20.5%. California skips the surtax mechanic and reaches a similar place with brackets alone, running from 1% to 12.3%, plus a flat 1% Mental Health Services Tax above $1 million, for a 13.3% top state rate.

	Toronto / Ontario	San Francisco / California
Top bracket before surtax/surcharge	13.16%	12.3%
Surtax/surcharge on top	20% + 36% surtax on basic tax	1% flat above $1,000,000
Effective top provincial/state rate	About 20.5%	13.3%
Combined with federal top rate	About 53.53%	About 50.3%
Sales tax	13% HST	About 8.625% to 9.875%, city-dependent
Estate tax	None federally, but probate and deemed disposition apply	None; California has no state estate tax

What happens to the deemed disposition on departure?

Ceasing Ontario residence triggers Canada’s departure tax first, at Ontario’s surtax-augmented rates, before a US return enters the picture. Most property is deemed sold at fair market value, and half of any gain becomes a taxable capital gain on your final T1. Because the province test keys off your last day of Canadian residence, the whole departure-year gain typically lands in Ontario, surtax included, with no California credit on the other side. The departure tax pillar and the T1161/T1243 guide cover the forms.

Does California really tax my RRSP every year?

Yes, and this is the trap that costs Toronto movers more than the rate table above. The treaty defers US federal tax on RRSP earnings until withdrawal, automatic for an eligible individual, no election required. California’s Franchise Tax Board takes the opposite position at the state level: the treaty deferral “does not apply for California income tax purposes,” and a California resident reports the plan’s interest, dividends, and realized gains as they accrue, every year, on Schedule CA. Nothing on your 1040 warns you this is coming, because the federal side stays quiet.

• California also allows no foreign tax credit for this, so there’s no way to offset the eventual Canadian withholding against California tax already paid on the same growth. The BC-to-California guide walks through the FTB’s own language, and what happens to your RRSP and TFSA covers the federal side first.

Does San Francisco tax my paycheck on top of California?

No, not directly, and this trips up a lot of people who assume a big city means a city income tax on top of the state one. San Francisco has no personal income tax on a W-2 salary. What the city does have is a Gross Receipts Tax and a Homelessness Gross Receipts Tax, both assessed on business revenue, not on an employee’s paycheck. Those taxes shape how much a smaller SF-based startup can pay in comp and headcount, but they don’t show up as a line item on your own return the way OHIP’s Ontario Health Premium used to.

• Where it matters is if you’re consulting on the side, running an LLC, or your equity comp is tied to a company whose margins these taxes affect.

How do my Toronto RSUs get taxed after the move?

In pieces, split by where you were sitting when each portion vested. A multi-year RSU grant issued while you worked in Toronto and vesting after your move to California gets sourced between the two jurisdictions based on the days you worked in each location during the vesting period, not just the date the shares actually vest. California taxes the California-source portion of each vest as ordinary income, Canada taxes the Ontario-source portion on your departure-year and any straddling return, and the split has to be tracked vest by vest for the first few years until your entire grant history postdates the move.

• Get the grant date, vesting schedule, and work-location history for every unvested tranche before you set a departure date; that record is what the sourcing calculation runs on, and it’s much harder to reconstruct after the fact than to pull now.

What happens to OHIP and the Ontario Health Premium?

Both end, on different clocks. OHIP continues for up to three months after you stop being an Ontario resident, then stops, leaving a gap before US coverage, an employer plan or a marketplace policy, actually starts. The Ontario Health Premium, up to $900 a year, stops accruing from the year after departure, though a partial departure year can still carry it. California has no equivalent premium, so budget employer or marketplace coverage as a new cost. The provincial health insurance guide covers the wind-down.

What does Prop 13 mean next to Ontario’s property tax?

A different system entirely, not just a different rate. Ontario reassesses property at current value, so a rising Toronto assessment climbs the tax bill with it. California’s Proposition 13 caps assessed value at your purchase price, with annual increases limited to 2% a year, and the nominal rate runs roughly 1.0% to 1.2% of that capped assessment. The catch is the reset at purchase: Bay Area home prices are steep enough that the fresh market-value assessment often produces a bigger first-year bill than a comparable Toronto home, even against Ontario’s uncapped model over time.

• Toronto’s land transfer tax, doubled by the municipal add-on, disappears the moment you’re not buying in Ontario, but it’s worth pricing back in if there’s any chance you buy back into that market later.

Where do Toronto tech movers actually land in the Bay Area?

Mostly San Francisco proper and the Peninsula, following the job rather than a single neighborhood pattern. SoMa and the Mission draw people who want to stay close to the city’s startup and tech-office density. Noe Valley and Cole Valley pull families once school considerations start to matter. Palo Alto, Mountain View, and Sunnyvale absorb the Silicon Valley commuters working at the larger campuses further south. Oakland and Berkeley across the Bay offer the lower-cost option for anyone willing to trade a shorter San Francisco commute for meaningfully cheaper housing.

• The employer’s campus location usually decides the neighborhood question before the tax question does; confirm the commute pattern before pricing housing.

Should I sell the Toronto home before or after I leave?

Before, generally, if you want the sale under ordinary resident rules rather than non-resident ones. Selling while still an Ontario resident keeps the sale inside the principal residence exemption and avoids the section 116 clearance certificate process for a non-resident vendor. Selling after residence ends still keeps the home outside the deemed disposition, since Canadian real property is carved out, but it brings a shrinking exemption fraction and the certificate process with it.

What should I do before the move?

Pull a full year of RRSP statements and your complete RSU grant and vesting history before setting a departure date, since both the California addback and the RSU sourcing split get built from those records. Decide the departure date on the facts; it fixes the Ontario surtax exposure on your final return and starts the OHIP and Trillium clocks. Price the Toronto home sale before departure against keeping it, and line up US health coverage before OHIP’s three-month window runs out.

• Ontario to California and the generic Canada to California corridor
• Toronto to Los Angeles, the entertainment-industry version of this same state pair
• Vancouver to San Francisco and BC to California, the RRSP mechanics from a different origin
• Toronto to New York, the other state-plus-city coastal corridor
• Toronto to Austin and Toronto to Miami, the no-state-tax alternatives
• Canada’s departure tax, T1161 and T1243 and the full departure checklist
• What happens to your RRSP and TFSA and the US-Canada tax treaty explained
• Your first US tax return as a Canadian immigrant
• Provincial health insurance when you leave and state income tax for cross-border filers
• Toronto to Atlanta, the Georgia flat-tax tech corridor
• Toronto to Denver, the outdoor-tech corridor
• Toronto to Washington DC, the consulting and policy corridor
• Toronto to Charlotte, the banking corridor with NC’s flat 4.5%
• Toronto to Nashville, the healthcare corridor with zero state tax
• Toronto to Houston, the energy corridor with zero state tax
• Toronto to Seattle, the tech corridor into Washington
• Toronto to Philadelphia, the pharma and finance corridor
• Montreal to San Francisco, the AI and deep learning corridor from Quebec
• Calgary to San Francisco, the energy-to-tech corridor from Alberta
• Toronto to Detroit, the auto and EV corridor into Michigan

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.