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I am interviewing with a company tomorrow that was on dice that listed as full time contract to hire W2. I read up and it says I would be a full time employee under contract with the option to hire. This is the first time I have ever applied for position with these employment terms.
1. Do this mean I get benefits or not?
2. If I am their employee W2 contract do they pay half the taxes, FICA, etc?
No benefits from the actual company but you will get it through the contracting firm if they have any
You are a temp (FT hours) to perm. It's like a trial basis.
Either the company or the contracting company that you will be going through will handle the taxes similar to any other W2 employee.
Generally speaking, you're 1099 for a period of time (usually 90-120 days) and transition to an actual W2 employee.
I'd confirm first that this is a common route for this employer (glassdoor, etc.) I see a ton of these out there that rarely convert to W2, and the end up back in the market.
Don't necessarily rule benefits out. The contracting company may have benefits (for example, Kelly Services offers benefits).
Chances are that you would have an opportunity to be a W2 employee through a staffing agency. If the employer likes you, they will bring you in directly.
-During the contract period you are paid via W2 by consulting firm. They also pay the employer's portion of ss tax. They don't pay you for holidays or vacation/sick days. You log the hours worked each week and you are paid for the hours you work.
They might have health insurance available and if you want it, you sign up and entire premium is deducted from your paycheck...maybe $450/mo for single. I have been on several contract gigs where they say 'no benefits', but most of them have health insurance available and you get the sign-up package shortly after you start. They just don't subsidize (pay for) any of the insurance.
Once it's time to go perm, if all works out with the client, then the client will offer you a full-time job.
Worked for half a dozen contract companies in Colorado over the last decade. Even the company itself can have it's own (contractor department), which means you're hired on a temp basis like a regular W2 employee but you receive no benefits. Most contract companies have very expensive medical and dental and offer no paid time off. We used to just trade shifts when we needed to take time off for vacations and things like that. Fortunately I worked a flex schedule of 12 hour shifts so I always had between 3 and 4 days off every week. But to take a whole week off would require working 7 12's in a row, which forced the employer to pay overtime but they really had no choice if they wanted the shift covered. (IBM comes to mind here).
W2 just means they withhold money for taxes and pay the employer portion of social security and medicare.
The alternative is 1099 which the IRS slaps down over and over agains. As a 1099 your taxes are not witheld and you have to pay estimated quarterly taxes and the employer portion of SS and Medicare. You are treated as if you own your own company or are self-employed. As I mentioned and posted in a thread a while back 1099 is almost always illegal which is why almost all legit agencies do w2 because the IRS will cream them for 1099.
Temp-to-hire for the most part is temp where the company has negotiated the possibility of hiring you with no or minimal finders fee to the agency. The agency get their money from charging the company a premium and paying you a pittance. It does not mean the company intends or will hire you. Companies only hire temps-to-hire 27% of the time so you would be well advised to continue your job search.
If I work for an agency and receive a W2, can I still claim mileage and other business expenses as a contractor. I paid for insurance, but the assignment was only 24 weeks? It was over an hour commute one way, and I had to buy a car to make sure that I didn't break down on the highway?
Would I just leave the 1099 income section blank and record my mileage expenses, etc. They paid my fee, but I did my work plans, used my lap top, etc. I only got paid for time worked. Thanks!
No as a 1099 you are treated as a business owner and can claim all sorts of deductions. As a W-2 you are considered an employee of the agency and only entitled to the same deductions everyone else is.
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