Yes, there are multiple differences between W-2 work and corp-to-corp employment. Hiring a W-2 employee means that you will work with them for an extended period of time. Employers pay specific taxes and withhold from W-2 wage earners.
Hiring a C2C worker is generally short term. You establish a set timeframe with another corporation and will gain greater flexibility for hiring.
When you hire a W-2 employee:
- Employees may work simultaneously with other employers
- Employees receive paid sick leave and vacation time
- Employers control how and when the employees work
When you establish a C2C contract:
- You must register as an S Corp or LLC
- Employees only work with you during their contract
- You must potentially reimburse more requested areas
Employers benefit from hiring both employment types despite the differences between W-2 and corp-to-corp employment. W-2 employees offer stability for a company and will adapt over time to the company culture. Employers benefit from C2C workers, because they reduce paying into employment taxes. Fewer employers misclassify C2C employees and avoid subsequent audits from the Internal Revenue Service.
In 2025, C2C jobs have seen significant growth across the United States. The biggest shift has occurred particularly in the e-commerce and retail sectors, owing to a greater transition toward online shopping.
People Also Ask
- Can payroll software handle different pay periods? – The short answer is, yes. The best payroll software is capable of processing different payment intervals, which makes your onboarding easier for W-2, 1099, and C2C workers.
- Is software necessary to handle 1099 and C2C workers? – Technically, no, but software will reduce the risk of manual errors and simplify how you import and export information for different worker classifications.
We make managing your payroll and non-employee compensation easier with our AMS Payroll add-on software. Call us today at (405) 340-0697 to learn which forms we support or download our free 1099-etc Demo software for comprehensive, hands-on insight.