Likewise, employers must determine whether to hire full-time workers or individuals who work on a contractual basis for certain roles or even entire departments. You will need to set regular hours and adhere to a schedule you set for yourself, which is no small task. No more losing hours each day because you are stuck in traffic on your daily commute to and from work. These precious hours lost can now be invested in your well-being. This can be greatly beneficial to both your physical and mental health.
To succeed independently, you are going to need clients. Even if you are bringing existing clients with you from a job, you will need to take excellent care of them to keep them. As a W2 employee, your employer pays 7.65% of your Medicare and Social Security taxes and you pay 7.65%. When you are paid by clients and file a form 1099 at tax-time, you’ll be required to pay the employers-share of these taxes, meaning that the full 15.3% comes out of each client payment you receive.
No more employer-sponsored health, dental, life, and disability insurance plans. Gone is the 401 plans with the employer match. This means going out and buying a disability insurance policy, funding a retirement plan, among many other things. As you can see, being a 1099 worker carries with it both advantages and disadvantages. Your age, health, marital status, and other factors may figure into your decision. For employers, deciding whether to hire someone for a position or to use contract labour is based on several factors. Even though supervision is an expense the employer assumes, it is also the significant advantage it has. Employers often find themselves unable to keep the best freelance talent working on their assignments. Freelancers can easily decide to work elsewhere for better compensation to pay for benefits or simply disappear without completing the work for which they were contracted. Having an employee on staff gives the employer the benefit of getting steady work done and fostering better company culture. Though they must offer competitive compensation, employers can count on good employees to be there and consistently churn out high-quality work. “W2” debate, it can be tough for both workers and companies to choose which route to take.
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