What W-2 employee means
A W-2 employee works under your direction, and you withhold taxes from their pay, pay the employer share of payroll taxes and report their wages to the IRS at year end.
Also called employee, payroll employee.
Where it shows up in your business
Employees cost more than their wage because of payroll taxes, workers comp and benefits. Price your labor rate with the burden, or every crew hour loses money.
Work it out
- Free calculator: Take-home pay calculator
- Money guide: 1099 vs W-2 for your first helper
- Money: Money guides for contractors