OW-2 n a W-2 contract, your agency will deduct all related taxes from your paycheck. Additionally, your hourly rate will typically be less than on a 1099 or Independent (Corp-to-Corp). This is due to the burden put on the agency.
- Easiest and simplest option.
- No bookkeeping needed, other than submitting time sheets.
- Some limited benefits may be available.
- Limited ability to defer income if a 401(k) benefit plan is unavailable.
- Deductibility of unreimbursed business expenses and medical insurance premiums is very limited.
- Getting health insurance coverage if none is provided can be a challenge.
- Any benefits package is likely to be less generous than that of a permanent employee’s.