Please could anyone let me know the difference between getting a monthly
salary vs an hourly rate ? both on W2
I have read in this forum lots of comparisms between hourly rate on W2 vs
Corp to Corp or 1099 but not the above.
I am on W2 working as an employee for a company going to receive a rate
of 70 % + medical + dental insurance. NO paid vacation pay, NO paid sick leave, NO paid training not sure about 401K plan must be NO, I just know % and medical
1) Do I need to pay the social security and medicare tax in whole or 50% of it will
be paid by my employer ? or I have to pay both the employee as well as the employers contribution.- I think on W2 the employer pays half of it, but just want
2) How will I know what is my rate with the vendor or client ? meaning how will
I know if I am really getting 70% of the rate ???
example if my client or vendor pays my employer a rate of $100/hr,
I should get $70/hr.but thats if I know the rate between my employer and the vendor or direct client. My employer could tell me that the client is paying
$80/hr so (70% of $80 = $56 !!!!)
3) Besides an hourly rate does my employer get additional monies from the client or vendor to cover expenses like benefits or taxes ?
4) The main reason I prefer to go hourly is because as I move to different clients during my career I know my rates could increase and so my money will increase
but if I were on a salary that would seldom increase
Thanks for everyones contribution, I just found this forum yesterday,,,,,,,I got lots of info from this forum that I never even thought of !!
Well, here is my opinions to your several questions. If I were you, I would consider an hourly rate to be better than a monthly rate. If you are on a fixed monthly rate, you probably won't be paid for any additional hours (overtime) and I have seen several companies take advantage of fixed-rate employees (similar to salaried employees with no overtime).
Here are the answers to your other questions:
1.) As a W-2 employee, you should only pay the 50% tax rate with the company paying the other half. 1099 and C2C will pay the full 100%.
2.) The only way you will know for sure is if you see the contract between the two companies. That will probably be hard to do.
3.) Not usually.
4.) I would be more worried about being paid for working all of the hours...and not working 'overtime' hours for free like salaried and other fixed-rate employees.
I'll attempt to answer some of your questions for you.
1) Must you pay the employer's contribution of any employment taxes?
No, not as a W2 employee. Regardless of whether you are paid hourly or via salary, as a W2 employee you are only liable for the employee's portion of any employment taxes.
2) Under normal circumstances, you might not know what a contract firm or staffing agency is charging for your services. If your arrangement calls for you to receive 70 percent of the billing rate plus benefits, ask for something in writing, although you may just have to take the agency's word for it.
3) There's no way to know what the terms of your agency's client agreement state about reimbursable charges without asking them.
One of the main differences between salaried compensation and hourly compensation is that you may be eligible for overtime when you are paid hourly and the number of available work hours often varies by month, so your total monthly compensation can fluctuate. Also, the timing of your payments may be affected when you are paid hourly, because you will need to submit a timecard and wait for payment. Each state has its own overtime laws and your hourly compensation rate and job duties play a role in determining your eligibility for overtime, so you'll need to check with the local wage hour authorities to determine if you are eligible for overtime. In some cases, even salaried employees are eligible for overtime payment.