At Jitjatjo, we classify our talent as W2 employees, providing you with the stability of employee status while still offering the flexibility to choose when and where you work. This means you'll receive important benefits like overtime pay, workers' compensation, and sick pay, while we handle the tax withholdings for you.

What do these categories mean and how do they affect your salary, benefits, and taxes? Take a look below where we dive into the details.

At Jitjatjo, we classify our talent as W2 employees, providing you with the stability of employee status while still offering the flexibility to choose when and where you work. This means you'll receive important benefits like overtime pay, workers' compensation, and sick pay, while we handle the tax withholdings for you.
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A W-2 worker is what we consider a typical employee, hired by a company to work according to the business needs for an undetermined amount of time. W-2 employees are paid a salary or on an hourly basis. The law guarantees W-2 employees must receive minimum wage as set by the state and federal law for the time they work. At Jitjatjo, you are classified as a W-2 worker, specifically as a variable hour employee.

1099 workers are not considered employees. They are self-employed, often referred to as freelancers or independent contractors who are usually hired by companies for a specified amount of time. As a 1099 worker, you can provide your services to multiple businesses simultaneously and your terms of service, hours and pay are something you set usually in an agreed-upon contract with the business.

The default classification of any working professional would be W-2 employee unless there is a compelling reason such as an explicitly written contract to classify the worker as an independent contractor. The IRS has provided the following criteria to help businesses classify their workforce appropriately.

W-2s and 1099s are the names of the different tax forms workers use to help file payroll taxes.

A W2 employer needs to withhold income taxes from the W-2 employees' paychecks and can have control over the tasks assigned to or performed by the employees.

1099 workers are self-employed, independent contractors, who receive pay based on the specific terms of their contract. When you're a 1099 worker, your employer does not withhold taxes. As a result, independent contractors do receive a bigger check initially for the work completed. However, they will still need to pay taxes on the money earned. Self-employment taxes which include Medicare and Social Security taxes total **~**15.3%. Your income tax bracket determines how much you should plan to pay in income tax.

As a W-2 employee, you may be eligible to participate in employee benefit programs, depending on your employment classification and hours worked. Benefit offerings and eligibility requirements can vary, and eligibility for certain benefits may be determined after a specified period of employment or during open enrollment periods. Some benefits may be available immediately upon hire, while others require meeting specific eligibility criteria.

One thing to keep in mind is that benefit programs and eligibility can differ between companies. It’s important to understand your company’s offerings and requirements for participation.

As a 1099 contractor, you are generally not eligible to receive employer-sponsored benefits. However, organizations may choose to offer certain benefits to contractors, which may have tax implications.

W-2 = Stability + Potential Benefits

As a W-2 worker, you are considered an employee with certain protections under labor laws. Benefit eligibility varies based on factors such as employment classification and hours worked, and access to benefits may be subject to eligibility requirements and enrollment periods. You may also be eligible for unemployment benefits if your employment ends, subject to state regulations.

As a W-2 employee, your work schedule and job expectations may vary. In some roles, schedules may be flexible and dependent on business needs, rather than fixed hours.

As a 1099 worker, you set your own hours providing you with more flexibility and control over your schedule. You can decide what work you want to take on and when you do the work. As a 1099 worker, you are usually hired for a specific amount of time so you're not tied to a set company or industry and can take on a variety of roles providing you with experiences in a variety of industries.

The downside of being 1099 is that you won't have paid vacation and sick days or other benefits that come along with being a W-2 employee. In addition, you must budget for taxes and expenses that come with running your own business.

There are pros and cons to both worker classification types. For those who seek stability and legal protections under labor laws, being a W-2 employee could be a good fit for you. For those who are more entrepreneurial, like the idea of more flexibility, and can manage the additional expenses and work that come along with running your own business, being a 1099 contractor could be the right classification for you. If given the decision to choose your worker classification a lot comes down to your goals and what works best with your lifestyle.

Jitjatjo is designed to provide flexible work opportunities and instant pay for talent. Given the flexibility and part-time aspect of the roles Jitjatjo provides, some may assume Jitjatjo workers are categorized as freelance workers, however they are classified as W-2 employees. This is why it's important to not only understand the difference between worker classifications but also to do your research when seeking out new opportunities.