A W-2 employee is someone who works as an employee of a company or organization. This type of employee works under a contract and receives a salary, wages, and benefits from the employer. They are considered to be tax-withheld employees, meaning that a portion of their income is taxed in order to pay the government. As a W-2 employee, you must also comply with other legal requirements such as social security, Medicare, and other payroll regulations.
Some believe W-2 employees have more job security than freelancers since their contracts are generally more solid and often include benefits such as healthcare plans and sick days. Additionally, W-2 employees don’t have to worry about paying their own taxes since the employer deducts them directly from their paycheck. This can be a major benefit for those who aren’t confident in their ability to accurately pay taxes on their own.
It is important for freelancers and potential freelancers to understand the difference between W-2 employees, other types of employees, and independent contractors so they can make the best decision for their situation.