Yes, there are a number of differences between W-2 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 gain greater flexibility for hiring.
When you hire a W-2 employee:
- Employees may work simultaneously with other employers
- Offer paid sick leave and vacation time
- Control how and when your employees work
When you establish a C2C contract:
- Register as an S Corp or LLC
- Employees only work with you during their contract
- 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. Over time they will adapt to the company culture. Employers separately benefit from C2C workers because they reduce paying into employment taxes. Fewer employers misclassify C2C employees and avoid the subsequent audits from the Internal Revenue Service.
We make managing your payroll and non-employee compensation easier with our AMS Payroll software. Call us today at (405) 340-0697 to learn which forms we support or download our free 1099-etc Demo for hands-on insight.