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offshore crew pay
Posted: Saturday, August 2, 2008 9:51 PM
Joined: 02/08/2008
Posts: 1

My question is about crew pay, we are a Marshall Is. flagged yacht with a mixed crew. How should the (american)owner be paying the crew? Should he have an offshore corp and use that to make up the payroll? Is it legal for him to pay non US crew from a US bank (his) to a US bank Account (crew)?  Does this create employment in the US? Thanks, Steve
Posted: Monday, August 4, 2008 11:13 AM
Joined: 19/05/2008
Posts: 52

Hi Steve
Thanks for your question.
I rather doubt this situation would create employment in the US. Firstly, you are all clearly employed as international seafarers, and secondly you are not employed on board a US-flagged vessel. I don’t see how the location of a crewmember’s bank makes any difference either, under such circumstances.
It’s unusual for beneficial owners to pay directly, as payment is normally undertaken by the owning company – which in this case would presumably not be in the US. Owning companies help to insulate the beneficial owner from liability as a ship owner, and also insulate the yacht from the owner’s creditors should he find himself in turbulent financial waters.

I hope this helps.
Benjamin Maltby

Posted: Friday, August 22, 2008 5:14 PM


In the following situation, are the crew considered international seafarers?  Are the wages considered US income?

The crew are US citizens.  The boat is Marshall flagged.  The ownership is a Canadian company.


Posted: Monday, August 25, 2008 10:10 AM
Hi there

Yes. Subject to any local anomalies, if you're being paid to work as a seafarer on a vessel sailing to and from various countries, then by definition you'd be an international seafarer.


Captain Curtis
Posted: Monday, August 25, 2008 4:39 PM
Joined: 30/06/2008
Posts: 1

Steve, If you are a US crew and sending your pay to a US bank you better save some for the Tax man.

Your home is in the US? If so you are subject to the IRS for US taxes no matter where you work. BUT,

If you are tring to not pay taxes in the US you better set up something to cover YOU not the owner.

Please check all the tax laws and play the Tax game that helps YOU keep more of your money.

Good Luck


Posted: Sunday, February 20, 2011 1:52 AM
Joined: 19/02/2011
Posts: 1

This is my first year under this pay structure, in the past always been paid as W-2 with all taxes withheld; in 2010

i received 2 forms W-2; one from a US based LLC in which all taxes were withheld on my part and the employer,

the other W-2 also from a US based  only shows Wages on box 1 and Fed WH but no SS wgs and no Med wgs or tax withheld.   question is:   when I file my income tax return this year 2010, do I have to pay SS tax and medicare ???   employer tells me that they gave me 2 W-2's because one is for work during US soil and the other for work underway.  anybody knows the rules ?

Posted: Sunday, February 20, 2011 2:42 AM
Joined: 25/06/2009
Posts: 277

Found something interesting


A yacht may be a "tax residence"?


"During 2001 and until May 5, 2002, the Strucks' business consisted principally of traveling in international and foreign waters to foreign countries on the yacht. They had neither a regular or principal place of business, nor a specific abode in a real and substantial sense during this time. However, while the Court concluded that the Strucks were itinerants, it also found that they had a foreign tax home during the 300-plus days they were physically present in a foreign country during the applicable periods and that they therefor they had a foreign tax home for purposes of the claimed foreign earned income exclusion."