Getting Hired
C2C vs W2 vs 1099: What Each US Contract Classification Really Does to Your Pay
Sumit Saxena · Delivery Lead · · 18 min read
Three recruiters call you in the same week about roughly the same role. The first says ninety two an hour, corp to corp. The second says seventy eight, W2. The third says ninety, 1099, and adds that the client is flexible.
You do the obvious sum. Ninety two beats seventy eight by fourteen dollars an hour, which across a year of billing is something close to twenty five thousand dollars, and that settles it.
It does not settle it. Those three numbers are not three prices for the same thing. They are the same budget cut in three different places, and the difference between them is not profit sitting on the table. It is a list of costs that somebody has to absorb, and the whole question is which of you it is going to be.
This article walks through all three. What each classification actually is, who withholds what, who carries the insurance and the liability, what happens on the bench, what happens to a contract to hire conversion, what the coded language in a job posting means, and then the same engagement costed out three ways so you can see how much of that fourteen dollar gap survives contact with reality.
If you contract in the US market, this is the part of your own pay that you were never shown the mechanics of.
What do C2C, W2 and 1099 actually mean?
W2 makes you an employee of the staffing vendor, which withholds your taxes and pays half of your Social Security and Medicare. 1099 makes you an independent contractor paid as an individual, responsible for your own taxes. C2C is a contract between two companies, the vendor and a business entity you own, so your company invoices and your company pays you.
Everything else follows from that one sentence. The name of each structure comes from the tax form at the end of it. A W2 is the wage statement an employer sends an employee. A 1099-NEC is the form a business sends a non employee it paid. Corp to corp produces no form about you at all, because the payment went to your company and not to you, and your company decides separately how money reaches your personal bank account.
Who is the employer in each case?
This is the question that decides most of the rest, and candidates rarely ask it out loud. On W2 the staffing vendor employs you. On 1099 nobody employs you, and you are running a one person business whether or not you have ever thought of it that way. On C2C your own company employs you, and the vendor is your customer rather than your boss.
That matters in a very practical way. When a client ends an engagement early, a W2 consultant is a terminated employee with access to unemployment insurance in most states. A 1099 or C2C consultant is a vendor whose purchase order stopped, with no unemployment claim and usually no notice period beyond whatever the contract says. Read the termination clause on a C2C agreement before you read the rate. Two weeks is normal. Zero days is not unusual, and it is worth knowing which one you signed.
Why does the staffing company care which one I pick?
Because the choice changes their cost, their compliance exposure and sometimes their right to submit you at all. A vendor carrying you on W2 pays employer taxes, unemployment insurance, workers compensation and benefits administration on top of your rate. Many end clients also forbid subcontracting entirely, which removes the option before the recruiter ever asks you.
There is a second reason that nobody says out loud on the call. Misclassification is expensive. If a worker who behaved like an employee was paid as a contractor, the company that paid them can end up liable for back payroll taxes, penalties and interest, and on the labor law side for unpaid overtime. Large clients handle that risk by writing a blanket rule into the program: everyone on this account is on a vendor’s W2, no exceptions, no independent contractors, no tier two subcontracting. It is cheaper for them to lose a few candidates than to defend one classification audit.
It is also not purely a question of how much risk a client is willing to carry. Several states apply a statutory ABC test to classification, California under AB5 and New Jersey and Massachusetts under their own equivalents, and that test is far harder to satisfy than the IRS common law test because every one of its three conditions has to be met. A national program that places consultants in those states often finds it simpler to run W2 only everywhere than to maintain a different rule per state.
So when a recruiter says the client will not do C2C, that is usually true. It is a rule they inherited, not a lever they are hiding from you.
Who decides whether I am an employee or a contractor?
The facts decide, not the label on the paperwork. The IRS applies a common law test looking at behavioral control, financial control and the relationship between the parties. If a client sets your hours, supervises your work and provides your tools, that engagement looks like employment no matter what the signed agreement calls it, and a wrong call creates tax exposure.
The three categories are worth knowing by name, because they are what an auditor actually walks through.
| Category | What it asks | What points toward employee |
|---|---|---|
| Behavioral control | Does the business direct what is done and how it is done? | Set hours, assigned tasks, required training, a named supervisor |
| Financial control | Does the business control the money side of the work? | Hourly pay, expenses reimbursed, no risk of loss, no other clients |
| Relationship of the parties | What do both sides think this is? | Open ended engagement, benefits offered, work central to the business |
Two practical notes. First, a worker or a firm can ask the IRS to make a formal determination by filing Form SS-8, and the IRS itself says that can take at least six months, so it is a remedy for a dispute rather than a planning tool. Second, the federal labor department’s own test for wage and hour purposes has been in motion. A 2024 rule was published, then the department directed its investigators to stop applying it while it is under review and litigation, and a fresh proposed rule went out for comment in early 2026. Tax classification and labor law classification are separate questions with separate tests, and the labor law half is genuinely unsettled right now.
None of that changes your day to day. It does mean that if you are ever told a classification is fine because everybody does it, that is not an answer.
Worth asking any vendor offering you 1099 on a long, full time, on site engagement: “Who at your company signed off that this role is 1099 rather than W2, and what was the basis?” A compliant firm will have a real answer. A firm that has not thought about it will change the subject.
What actually comes out of your pay on each one?
On W2 the vendor takes income tax and your half of Social Security and Medicare before you see anything, and pays its own half separately. On 1099 and C2C nothing is withheld at all, so the full self-employment tax, the health coverage, the insurance and the accounting are yours to fund out of a rate that has to be bigger to make that possible. Here is the side by side, before any arithmetic.
| Dimension | W2 with the vendor | 1099 independent | C2C through your company |
|---|---|---|---|
| Who withholds your income tax | The vendor, every pay period | Nobody. You file quarterly estimates | Nobody. You file quarterly estimates |
| Social Security and Medicare | 7.65% from you, 7.65% from the employer | 15.3% self-employment tax, from you | 15.3% unless your entity changes the split |
| Deduction for half of it | Not applicable, employer pays their half | Half of self-employment tax is deductible | Half of self-employment tax is deductible |
| Health insurance | Whatever plan the vendor offers | You buy it, usually deductible | You buy it, personally or through the entity |
| Paid time off | Sometimes, often accrued and small | None. Time off is unbilled time | None. Time off is unbilled time |
| Unemployment if the contract ends | Usually eligible | Not eligible | Not eligible |
| Workers compensation | Carried by the vendor | You carry it if required | You carry it, often contractually required |
| General and professional liability | Carried by the vendor | Often required of you | Almost always required of you |
| Business expense deductions | Very limited | Schedule C expenses | Company expenses |
| Possible QBI deduction | No | Potentially | Potentially |
| Entity and admin cost | None | Low. Maybe a CPA | Formation, registered agent, payroll, CPA |
| Who signs the contract | You, as an employee | You, personally | Your company |
| Personal liability if something goes wrong | Employer’s exposure | Yours, personally | Your company’s, if run properly |
Read down the C2C column and you can see what the extra fourteen dollars an hour is for. It is not a bonus. It is a budget for the twelve rows underneath it.
What does that look like in real dollars?
A fourteen dollar an hour headline gap comes down to roughly three thousand dollars across a full year once every cost is counted on the same engagement. Numbers from here on are illustrations of the structure, not a claim about what any particular market pays. Plug in your own rate and your own costs, because the shape of the answer is the point and the shape holds at most rates.
Take one engagement. Assume 1,800 billable hours across the year, which is a full time contract with client holidays, some time off and a short gap in it. Assume the vendor has one budget for you and prices each structure out of it: $78 an hour on W2, $90 on 1099, $92 on C2C. Assume you want comparable health coverage in all three.
The W2 version. $78 times 1,800 hours is $140,400 in gross wages. Say the vendor’s plan costs you $450 a month, taken before tax, so $5,400 for the year. That leaves $135,000 subject to payroll tax. Your half of Social Security and Medicare at 7.65% is $10,327.50, and for 2026 the entire amount sits under the Social Security wage base of $184,500 so none of it escapes. Before federal and state income tax you are left with about $124,672, and you are covered.
The 1099 version. $90 times 1,800 is $162,000. Take out a CPA at roughly $1,200 and the liability insurance most contracts require, say $1,500, and you have $159,300 of net business income. Self-employment tax is charged at 15.3% on 92.35% of that, which is $147,113 taxed at 15.3%, or $22,508. Then buy your own health plan on the individual market at, say, $850 a month, which is $10,200. You are at about $126,592 before income tax, with half the self-employment tax and the health premium both deductible further down your return.
One assumption before the third version. The C2C figures below model a single member LLC taxed as a disregarded entity, which is what your company is by default before you make an S election, so self-employment tax is charged the same way it is on 1099. A corporation, including an S corporation, pays no self-employment tax at all and runs payroll instead, which changes the computation in the way described under the table.
The C2C version. $92 times 1,800 is $165,600 into the company. Formation and a registered agent at $500, a payroll service and CPA at $2,400, general and professional liability at $1,500, workers compensation at $600. That is $160,600. Self-employment tax on 92.35% of it is $22,692. The same $10,200 health plan comes out. You land near $127,708.
| Structure | Headline rate | Gross for the year | Costs and taxes counted here | Left before income tax |
|---|---|---|---|---|
| W2 with the vendor | $78 | $140,400 | $5,400 premiums, $10,327 payroll tax | about $124,672 |
| 1099 independent | $90 | $162,000 | $2,700 business costs, $22,508 SE tax, $10,200 health | about $126,592 |
| C2C through your entity | $92 | $165,600 | $5,000 business costs, $22,692 SE tax, $10,200 health | about $127,708 |
Fourteen dollars an hour at the top of the page, about three thousand dollars at the bottom of it. That is the finding, and it is the reason this article exists.
Three things that arithmetic does not capture, all of which can move it further than the gap itself.
The first is the S corporation election. If your entity elects S corporation treatment, you pay yourself a reasonable salary through payroll and take the remainder as a distribution, and the distribution does not carry self-employment tax. On the numbers above that can be worth real money. It also costs more in payroll and accounting, it only works if the salary you set is genuinely reasonable for the work, and getting that wrong is one of the more commonly examined positions in small business tax. It is a conversation with a CPA, not a decision to make on a recruiter call.
The second is the qualified business income deduction, which can allow eligible self-employed taxpayers to deduct up to 20 percent of qualified business income. Consulting is a service business, so income thresholds and phase outs matter a great deal, and whether you get any of it depends on your whole return rather than on the engagement.
The third is the bench. The W2 column is the only one with unemployment insurance behind it. If the client cuts the project at month five, the difference between the structures stops being a few thousand dollars and becomes whether any money arrives at all while you look for the next one.
Is 1099 the same as corp to corp if I am the only person in my company?
No. On 1099 you are paid as an individual and the income lands on your personal return, usually on Schedule C. On C2C the contract is between two businesses, so your company is the party that signs, invoices and carries the insurance, and you decide separately how your company pays you. The tax outcome can be similar but the legal separation is not.
That separation is the actual product you are buying when you form an entity. If a client alleges that your work caused a loss, the party they pursue is the party that signed. A properly maintained entity with its own bank account, its own insurance and its own books puts a wall between that claim and your house. A sole proprietorship does not have that wall, which is why so many client contracts insist on an entity plus certificates of insurance before they will let a subcontractor near the work.
Maintained is the operative word. An entity that shares your personal checking account, files nothing and holds no insurance provides considerably less protection than its owner assumes.
There is also a paperwork difference at the year end that trips people up. Payments to a corporation are generally not reported on a 1099-NEC, so a C2C consultant may receive no information return at all and still owes exactly the same tax. And the reporting threshold itself moved: the long standing $600 floor for these information returns was raised to $2,000 for payments made after the end of 2025, with inflation indexing after 2026. A form not arriving has never meant income not counting, and it means it even less now.
What happens to benefits, time off and insurance on each?
Short version: on W2 the vendor may offer something, on the other two you are the benefits department. The gap is smaller than it sounds, because vendor benefit plans on contract staff are frequently thin. What is never thin is the time off difference. On all three structures, an hour you do not bill is an hour you are not paid for, and only a W2 arrangement ever comes with accrued paid leave attached.
Ask these questions about a W2 offer rather than assuming:
“Is there a waiting period before the health plan starts, and how many days is it?” “What is the monthly employee contribution for the plan level I would need, and what is the deductible and out of pocket maximum?” “Is there paid time off, is it accrued or granted, and does unused time pay out if the contract ends?” “Is there a 401(k), is there a match, and is there a vesting schedule on the match?” “If the client ends the assignment early, am I paid through a notice period or does pay stop that day?”
On C2C and 1099 the same questions become a shopping list you own. Individual market health coverage, a retirement plan built for the self-employed, disability coverage that a salaried employee usually gets through work, and the liability policies the contract requires. Price all of it before you accept the rate, not after. The most common way a C2C engagement disappoints is that the consultant priced the rate against a salary and then discovered the insurance certificates were mandatory.
Which structure works with my work authorization?
This is the one place where the answer is not a preference. If you hold an H-1B, you work for the employer that petitioned for you, which means W2 with that employer, full stop in the ordinary case. You can be placed at a client and you can move through a vendor chain, but the employment relationship stays with the petitioner, and working corp to corp through a company you own is not an arrangement to improvise.
| Status | W2 with a vendor | 1099 | C2C through your own entity |
|---|---|---|---|
| US citizen or permanent resident | Yes | Yes | Yes |
| Employment authorization document, such as an H-4 EAD or an adjustment of status EAD | Yes | Generally yes | Generally yes |
| H-1B | Yes, with the petitioning employer | No | Only through the entity that petitioned for you. Since January 2025 that entity can be a company you control, with shorter initial approvals and its own compliance conditions. Not a structure to arrange without an immigration attorney |
| F-1 on post completion OPT | Yes | Yes. SEVP lists work for hire among the permitted employment types, provided the work is directly related to your field of study | Yes. SEVP also lists self-employed business owner, provided the work is directly related to your field of study and you hold the business licenses your state and locality require |
| F-1 on STEM OPT | Only if the vendor itself provides and supervises the training. Third party client placement and labor for hire arrangements usually fail the bona fide employer test. The employer must also be enrolled in E-Verify | No. A bona fide employer relationship is required | No |
| TN, L-1 and similar employer specific statuses | Yes, with the sponsoring employer | No | No |
Treat that table as the shape of the rules and not as advice about your case. Immigration status interacts with classification in ways that are specific to your history, and the cost of guessing wrong is your status rather than your tax bill. Get it confirmed by an immigration attorney before you sign anything unusual, and be extremely wary of any vendor that suggests a structure your status does not obviously support.
What does “must be on our W2, no C2C” actually mean?
It means the end client or the prime vendor requires every consultant on the engagement to be a direct employee of the vendor submitting them, on payroll, with taxes withheld. It is a compliance rule about misclassification and liability, not a negotiating position, so asking the recruiter to make an exception almost never works and sometimes ends the conversation.
Job postings and rate calls carry a small private vocabulary. Here is what the common phrases are actually telling you.
| What you hear or read | What it means |
|---|---|
| “W2 only, no C2C, no third party” | Everyone bills through the submitting vendor’s payroll. Your entity cannot be in the chain |
| “C2C welcome, need your own corp” | You must have an entity, an EIN and usually certificates of insurance before they can paper it |
| “No corp to corp, no 1099” | Same as W2 only, stated twice because candidates keep asking |
| “1099 or C2C, your choice” | Nothing is withheld either way. Set aside your own tax from the first invoice |
| “W2 with benefits” | Ask what the benefits are. The phrase covers everything from a real plan to a minimum essential coverage product |
| “Rate is all inclusive” | Expenses, travel and equipment come out of that number, not on top of it |
| “Must be on our W2 for the first six months” | Usually a contract to hire structure. Ask about the conversion terms now |
| “No third party candidates” | The client wants to deal with one vendor. A tier two submission will be rejected |
| “Independent visa candidates only” | They want candidates who do not need a specific employer’s sponsorship |
| “We can do C2C but the rate is lower” | Unusual. Ask what is coming out of it, because C2C normally prices higher |
The phrase to take literally every time is the first one. When a client program is built on W2 only, the vendor physically cannot enter a subcontracted candidate into the system, and pushing on it burns goodwill with a recruiter who would otherwise keep calling you.
What should I say on the rate call?
Say what you are, say what you are open to, and give a number for each structure rather than one number that has to mean three different things. Recruiters work through a long list, and the candidate who answers in the format the requirement needs gets processed first. Vagueness here is not caution. It costs you the submission.
“I can work either W2 or corp to corp. I have my own S corp with an EIN, and I can provide certificates for general and professional liability. On C2C I am looking at ninety two an hour. On your W2 I would be at seventy eight, assuming the health plan starts within thirty days. Which one does the client require?”
If they open with the classic question, do not answer it with a single figure.
Recruiter: “What is your rate?” You: “Depends on the structure. Before I give you a number, is this W2 with your company, or is corp to corp open on this account? And is the client covering anything separately, or is the rate all inclusive?”
And when they will not move:
“I understand seventy eight is the ceiling on W2 for this account. Two things that would make it work at that number. Does the health plan start on day one rather than after thirty days, and is there any paid time off accrual? If both are no, then I am effectively at a lower number than it looks and I would want to revisit the rate.”
None of those scripts are aggressive. They are just the version of the conversation where you know what you are pricing. A more general framework for that conversation, including who names a number first and what to do when they will not move, is in the guide to negotiating salary and rate.
How does contract to hire change the arithmetic?
W2 with the vendor is usually the cleaner path, because the conversion is an employment change rather than the dissolution of a business relationship, and most conversion fees are written around a W2 consultant. C2C conversions happen, but check the contract for the conversion fee, the buyout period and any clause restricting you from accepting a direct offer.
The part candidates miss is that a contract to hire engagement has two different pay structures in it, and they are separated by a step that nobody prices for you. The hourly rate covers no benefits and no paid leave. The salary that follows conversion covers both, but it will almost never be the hourly rate multiplied out, because the employer is now funding the things the hourly rate was funding for you.
So convert it before you accept. Take the hourly rate, multiply by realistic billable hours, and subtract what you are paying for insurance and carrying in unpaid time. That gives you a comparable number. Then ask three questions in writing.
“At what point does conversion happen, and is it a fixed date, a fixed number of hours, or a discussion?” “What is the target salary band at conversion, and does the contract period count toward seniority, vesting or the retirement match?” “Is there a conversion fee, and if so is there a buyout schedule that reduces it over the contract period?”
That last one is the clause that kills conversions quietly. Some agreements let a client convert you for free after a set number of hours, some charge a percentage of the first year salary, and a few include a non solicitation clause that blocks a direct offer entirely for a period after the engagement ends. Read it before month eleven, not during it. The broader question of when a contract track is right at all is worked through from a different market’s angle in the comparison of contract and permanent work.
How do I compare three offers that are structured differently?
Put all three on one page and convert everything into the same unit, which is dollars you keep across a year. The order that works is: annualize the rate, subtract the costs you now carry, subtract the unpaid time, then score the things that are not money, which are bench risk, conversion path and how easily you can leave.
Use this worksheet. Eight lines, same lines for all three offers.
- Hourly rate as offered.
- Realistic billable hours. Not 2,080. Take out holidays the client closes for, time off you will actually take, and any gap before the start date.
- Gross for the year, being line one times line two.
- Employer side costs you now carry. Zero on W2. On the other two, the employer half of payroll tax plus your entity, insurance and accounting costs.
- Health, dental and disability coverage at the level you need, priced for real rather than estimated.
- Retirement. What the vendor contributes on W2, what you would have to contribute yourself otherwise.
- Bench exposure. Termination notice in the contract, and whether unemployment insurance is available if it ends.
- The exit. Non compete or non solicitation clauses, conversion fees and anything that limits where you work next.
Lines one to six give you a number. Lines seven and eight decide what you do when the numbers are close, and in practice they usually are close. A structured method for weighing the non money lines against the money ones is set out in the guide to comparing two offers, and it transfers directly to this decision.
What paperwork should be ready before day one?
Different stacks for different structures, and the C2C stack is the one that delays starts. Have it assembled before you need it, because a requirement that closes on Friday will not wait while you form an entity. The item most often missing on a W2 start is the original identity document for the I-9, rarely accepted as a scan or a photocopy, and the employer has only three business days from your first day to inspect it.
| Structure | What you need ready |
|---|---|
| W2 | Form W-4, Form I-9 with original identity documents, direct deposit details, state withholding form |
| 1099 | Completed Form W-9, EIN or SSN, liability certificates if the contract requires them, a system for quarterly estimated tax |
| C2C | Entity registration and good standing, EIN, Form W-9 in the company’s name, certificates of insurance naming the right parties, a business bank account, a signed subcontract and a purchase order |
One detail on the C2C row that costs people days. Certificates of insurance usually have to name the prime vendor or the end client as an additional insured, with specific coverage limits taken from the contract. Your broker can issue that in a day once they have the contract language, and cannot issue it at all until they do. Ask for the insurance requirements at the same time you ask for the rate.
Common mistakes
Comparing a C2C rate with a W2 rate as if they measure the same thing. They differ by everything in the middle column of the table above. The comparison is only meaningful after both have been annualized and both have had your real costs taken out.
Taking 1099 on an engagement that is plainly employment. Fixed hours, a client supervisor, client equipment, no other clients and no defined deliverable. That pattern creates exposure for both sides, and the side with less legal support is you.
Forgetting quarterly estimated tax in the first year. Nobody withholds on 1099 or C2C. The money in your account is not yours yet, and the underpayment penalty surprises a lot of first year consultants.
Forming the entity after the offer. Registration, the EIN, the bank account and the insurance certificates take days that you may not have. Form it while you are still interviewing.
Believing that no 1099 arrived means no income to report. Payments to a corporation are frequently not reported on an information return at all, and the threshold for the ones that are reported has risen. Neither fact changes what you owe.
Skipping the termination clause. The rate is the paragraph everyone reads. Notice period, early termination and payment terms are the paragraphs that decide what happens in the bad month.
Treating net thirty as immediate. Many C2C agreements pay thirty to forty five days after an approved invoice, and some pay only when the client pays the vendor. Ask whether payment is conditional on the vendor being paid first, because that clause changes your cash flow risk completely.
Expert tips from the delivery side
Give the recruiter both numbers unprompted. A candidate who says “ninety two C2C or seventy eight on your W2” can be matched against any requirement on the desk. A candidate with one number has to be called back, and callbacks lose to speed.
Ask which layer you would be contracting with. On C2C you may be subcontracting to a tier two vendor rather than to the prime. That affects who pays you, how fast, and what happens if the layer above them delays.
Keep the entity alive between engagements. Dissolving a corporation because you took a permanent role and reforming it eighteen months later costs more than the registered agent fee you were avoiding.
Price time off honestly. Two weeks of unbilled time at ninety two dollars an hour is about seven thousand dollars. It is not a rounding error and it should be in line two of the worksheet.
Get the rate in writing before the submission goes in. Once a rate is entered against a requirement it is very hard to move, because it has to be re-approved by people who never spoke to you.
Do not let a vendor create an entity for you. It happens, and it usually ends with someone else’s address on your registration and a control problem you did not sign up for.
Talk to a CPA once, properly, in year one. One paid hour covering entity choice, the S corporation question and quarterly estimates repays itself immediately, and the answers are specific to your total household income rather than to the engagement.
The pre-signature checklist
Run this before you say yes to any of the three.
- I know which classification this engagement is, and I have it in writing.
- I have annualized the rate against realistic billable hours, not 2,080.
- I have priced health coverage at the level my household actually needs.
- I know what happens to my pay if the client ends the engagement early.
- I have read the termination clause, the payment terms and whether payment is conditional on the vendor being paid.
- If it is C2C, my entity is registered, my EIN exists and my broker has the insurance requirements.
- If it is 1099 or C2C, I have a plan and a separate account for quarterly estimated tax.
- If it is contract to hire, I know the conversion trigger, the target salary band and the conversion fee.
- I have checked the classification against my work authorization with someone qualified to answer.
- I have read any non solicitation or non compete language and I know where it leaves me in twelve months.
FAQs
What is the difference between C2C, W2 and 1099?
W2 makes you an employee of the staffing vendor, which withholds your taxes and pays half of your Social Security and Medicare. 1099 makes you an independent contractor paid as an individual, responsible for your own taxes. C2C is a contract between two companies, the vendor and a business entity you own, so your company invoices and your company pays you.
Why is the C2C rate higher than the W2 rate for the same job?
Because the vendor’s budget for you is a single number and the W2 version has to fund things the C2C version does not. Employer Social Security and Medicare, unemployment insurance, workers compensation, general liability coverage and benefits administration all come out of that number first. On C2C those costs move to your company, so the hourly figure looks larger.
Can I work on corp to corp on an H-1B visa?
Only through the entity that petitioned for you. An H-1B worker must be employed by the employer that filed the petition, so you are on that employer’s W2 and your rate is whatever they pay you. Since January 2025 that petitioning entity can be a company you control, with shorter initial approvals and its own compliance conditions attached, but it is not a structure to arrange without an immigration attorney.
What does W2 only, no C2C mean in a job posting?
It means the end client or the prime vendor requires every consultant on the engagement to be a direct employee of the vendor submitting them, on payroll, with taxes withheld. It is a compliance rule about misclassification and liability, not a negotiating position, so asking the recruiter to make an exception almost never works and sometimes ends the conversation.
Is 1099 the same as corp to corp?
No. On 1099 you are paid as an individual and the income lands on your personal return, usually on Schedule C. On C2C the contract is between two businesses, so your company is the party that signs, invoices and carries the insurance, and you decide separately how your company pays you. The tax outcome can be similar but the legal separation is not.
Which classification is better for a contract to hire role?
W2 with the vendor is usually the cleaner path, because the conversion is an employment change rather than the dissolution of a business relationship, and most conversion fees are written around a W2 consultant. C2C conversions happen, but check the contract for the conversion fee, the buyout period and any clause restricting you from accepting a direct offer.
Who decides whether I am an employee or an independent contractor?
The facts decide, not the label on the paperwork. The IRS applies a common law test looking at behavioral control, financial control and the relationship between the parties. If a client sets your hours, supervises your work and provides your tools, that engagement looks like employment no matter what the signed agreement calls it, and a wrong call creates tax exposure.
Can an experienced consultant get help with this without joining a training program?
Yes. A consultant choosing between three offer structures does not need a course. What helps is someone costing all three out on the same engagement, reading the agreement for the conversion and non solicitation terms, and rehearsing the rate call. Campus4tech offers standalone job support with no training attached, and we continue working with candidates until they are successfully placed.
Summary
The three classifications are not three prices for one job. They are three different answers to the question of who carries the cost of employing you, and the hourly figure moves to reflect whichever answer you picked. Corp to corp pays the most per hour precisely because it hands you the most to pay for: both halves of the payroll tax, your own health insurance, your own insurance certificates, your own accounting and your own exposure when a project stops early. Once all of that is counted on the same engagement, a fourteen dollar an hour gap can come down to a few thousand dollars across a full year, and sometimes it points the other way.
So do the arithmetic before you answer the recruiter, not after. Annualize against hours you will really bill, subtract the costs that move to you, price the insurance for real rather than from memory, and then look at the three numbers side by side. When they come out close, and they usually do, the decision moves to the things that were never on the rate sheet. Whether unemployment insurance exists behind this engagement. Whether the termination clause gives you two weeks or nothing. Whether the conversion path is written down or is a sentence someone said on a call.
And be honest about which structure your situation supports rather than which one pays best on paper. Work authorization is not a preference. Neither is a client program that runs W2 only. Most of the time the real choice is narrower than the three column table suggests, and knowing that early saves you from negotiating for a structure that was never available on this requirement.
Get the classification in writing, get the insurance requirements at the same time you get the rate, and set aside the tax from the first invoice rather than the first quarter. If you want a second pair of eyes on three offers that are structured differently, you can look at the contract and consulting roles we are recruiting for or use standalone job support for experienced professionals, which carries no training enrollment with it.
Campus4tech works with experienced technology professionals through the parts of a contract job change that nobody rehearses, and choosing between a W2 rate, a 1099 rate and a corp to corp rate is one of the most expensive of them to get wrong. If you want all three costed out on the same engagement, the agreement read for conversion and termination terms, or the rate call rehearsed before you make it, you can book a free consultation and bring the offers with you. Nothing here is tax, legal or immigration advice, so take the specifics of your own situation to a CPA and, where your status is involved, to an immigration attorney. We continue working with candidates until they are successfully placed.
Written by
Sumit Saxena
Delivery Lead
Focuses on candidate submissions, interview coordination and employer relationships.