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W2 or corp 2 corp

 
S. Palanigounder
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Posts: 145
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I just got a new contract offer, and have the options to
do W2 or corp 2 corp. Which one is better? If my W2 rate
is $50/hour, what the corp 2 corp rate should be?

Thanks
 
Michael Ernest
High Plains Drifter
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Posts: 7292
Netbeans IDE VI Editor
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The differen between W2 and corp-to-corp is in who assumes liability to withholding taxes. For a W2, the company thay pays you must manage it. If corp-to-corp, the corporation (yours, presumably) that pays you manages it.

When paying through W2, a corporation pays additional taxes. In the US, this extra overhead includes matching the employee's withholding for Social Security benefits and Medicare. There may also be additional withholdings levied by the state, such as unemployment insurance.

Unless you have a corporation of your own already set up, you're probably better taking the W-2. It's a lot less work at that point.
 
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