A W2 employee is an individual who is employed by a company and receives a Form W-2 from their employer. This form is used to report wages, tips, and other compensation paid to the employee during the year. It also reports taxes withheld from the employee’s paychecks, such as Social Security and Medicare taxes. The information on the W-2 is used to prepare the employee’s federal and state income tax returns. W2 employees are considered “employees” for tax purposes, meaning they are subject to withholding and employment taxes.
What Is a W2 Employee and How Does It Differ from Other Types of Employment?
A W2 employee is an individual who is employed by a company and receives a salary or wages for their services. This type of employment differs from other types of employment in that the employer withholds taxes from the employee’s paycheck, pays Social Security and Medicare taxes on behalf of the employee, and issues a W-2 form to the employee at the end of the year.
The employer also provides certain benefits to the employee such as health insurance, vacation time, and retirement plans. The employer is responsible for filing all necessary paperwork with the Internal Revenue Service (IRS) and state tax agencies.
In contrast, other types of employment may include independent contractors, freelancers, and self-employed individuals. These individuals are not considered employees and do not receive the same benefits as W2 employees. They are responsible for paying their own taxes and filing their own paperwork with the IRS and state tax agencies. Additionally, they are not eligible for unemployment benefits or workers’ compensation.
Overall, W2 employees are those who are employed by a company and receive a salary or wages for their services. They are provided with certain benefits and have taxes withheld from their paychecks. In contrast, other types of employment do not provide the same benefits and require the individual to pay their own taxes and file their own paperwork.