| Aspect | W2 Employee | 1099 Contractor |
|---|
| Tax Withholding | Employer withholds taxes from paycheck | Responsible for own taxes and self-employment taxes |
| Work Environment | Typically works on-site or remotely under employer supervision | Works independently, often on a project basis |
| Credentials & Certifications | May require specific certifications, but employer handles payroll | Often needs relevant certifications; manages own taxes and invoicing |
| Employer Usage | Commonly used by companies for regular employees | Used by businesses for freelance or project-based work |
W2 employees have taxes withheld by their employer and typically work under direct supervision, while 1099 contractors handle their own taxes and work independently. Understanding these differences helps determine the best employment or contracting option for your needs.