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W-2 vs 1099 Comparison

Compare the financial impact of being an employee versus an independent contractor

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Health insurance, 401k match, etc.

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Equipment, software, home office, etc.

Key Differences

W-2 Employee

  • • Employer pays half of payroll taxes
  • • Benefits often included
  • • Taxes withheld automatically
  • • Limited business deductions
  • • More job security

1099 Contractor

  • • Pay full self-employment tax (15.3%)
  • • Must provide own benefits
  • • Quarterly estimated tax payments
  • • Can deduct business expenses
  • • More flexibility and control