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.

W-2 Pros:

• Easiest and simplest option.
• No bookkeeping needed, other than submitting time sheets.
• Some limited benefits may be available.

W-2 Cons:

• 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.