• Post Reply Bookmark Topic Watch Topic
  • New Topic
programming forums Java Mobile Certification Databases Caching Books Engineering Micro Controllers OS Languages Paradigms IDEs Build Tools Frameworks Application Servers Open Source This Site Careers Other Pie Elite all forums
this forum made possible by our volunteer staff, including ...
Marshals:
  • Campbell Ritchie
  • Ron McLeod
  • Paul Clapham
  • Rob Spoor
  • Liutauras Vilda
Sheriffs:
  • Jeanne Boyarsky
  • Junilu Lacar
  • Tim Cooke
Saloon Keepers:
  • Tim Holloway
  • Piet Souris
  • Stephan van Hulst
  • Tim Moores
  • Carey Brown
Bartenders:
  • Frits Walraven
  • Himai Minh

1099 vs. W2

 
Bartender
Posts: 9625
16
Mac OS X Linux Windows
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator
I've been working for a while as an independent contractor (1099). I'm looking for a new contract and one that I've found insists on a W2. What would be the equivalent hourly rate for a W2 contract position?
 
Ranch Hand
Posts: 2713
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator
You can typically get about $5/hour more on a 1099 than you can on a W2. Of course, this varies from place to place.
[ February 03, 2004: Message edited by: Chris Mathews ]
 
Author
Posts: 6055
8
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator
I've got to disagree with Chris.
Most commonly, a W-2 is a full time salaried employee with benefits (which may include any or all of the following: medical, dental, vision, life insurance, 401k, section 125, and less commonly tuition reimbursement and other perks), whereas a 1099 is a contract employee paid hourly with no benefits. You can be W-2 hourly or 1099 salaried. W-2's may not get benefits and 1099's may, although those are both uncommon. The other main exception is that with a W-2 your employer is requirement to pay SS tax and unemployment insurance (and maybe something else, too). A W-2 who gets laid off can file for unemployment, a 1099 can't.
Typically 1099's get a higher wage (when calcuated as (total dollars)/(total hours)). This is to compensate for the lost benefits (compared to a W-2) and higher risk (since most 1099's are contract and must continually seek new employment). It's usually more than $5/hr.
--Mark
 
Chris Mathews
Ranch Hand
Posts: 2713
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator

Originally posted by Mark Herschberg:
I've got to disagree with Chris.
Most commonly, a W-2 is a full time salaried employee with benefits (which may include any or all of the following: medical, dental, vision, life insurance, 401k, section 125, and less commonly tuition reimbursement and other perks), whereas a 1099 is a contract employee paid hourly with no benefits. You can be W-2 hourly or 1099 salaried. W-2's may not get benefits and 1099's may, although those are both uncommon. The other main exception is that with a W-2 your employer is requirement to pay SS tax and unemployment insurance (and maybe something else, too). A W-2 who gets laid off can file for unemployment, a 1099 can't.
Typically 1099's get a higher wage (when calcuated as (total dollars)/(total hours)). This is to compensate for the lost benefits (compared to a W-2) and higher risk (since most 1099's are contract and must continually seek new employment). It's usually more than $5/hr.
--Mark


My response was on the assumption that Joe was referring to a fixed-length contract on a W2 hourly basis.
Mark you may be correct on this one but typically what I see on contract offers (I have had a couple lately) is that the company is willing to go about $5-$10/hr higher on a 1099. In both cases I was offered the choice of which one I wanted. In both cases I turned down the offer but I would have went with the W2 option if I hadn't. I am not a big fan of extra work required from doing 1099 jobs. I am just too lazy for that.
 
Joe Ess
Bartender
Posts: 9625
16
Mac OS X Linux Windows
  • Mark post as helpful
  • send pies
    Number of slices to send:
    Optional 'thank-you' note:
  • Quote
  • Report post to moderator

Originally posted by Chris Mathews:

My response was on the assumption that Joe was referring to a fixed-length contract on a W2 hourly basis.


You are correct. I did some googling and found a couple of figures between 6 and 8% difference between W2 and 1099. Strange, since the employer contribution to FICA is 7.5% for the first $75k. The figures I found don't take into account the lack of unemployment or worker's comp. . .
 
You showed up just in time for the waffles! And this tiny ad:
Building a Better World in your Backyard by Paul Wheaton and Shawn Klassen-Koop
https://coderanch.com/wiki/718759/books/Building-World-Backyard-Paul-Wheaton
reply
    Bookmark Topic Watch Topic
  • New Topic