Humla is the leading nursing platform, created by nurses for nurses, that matches you directly with healthcare facilities. No agencies, no recruiters, no hassle.
W-2 Employee vs. 1099 Contractor: What Every Nurse Should Know
The world of nursing is more flexible than ever. With numerous apps and platforms offering per diem shifts and local assignments, you have more control over your schedule. But as you explore these opportunities, you'll encounter two different ways of being paid: as a W-2 employee or a 1099 independent contractor.
Understanding the difference is crucial, as it impacts everything from your taxes and take-home pay to your legal protections.
At Humla, we made a deliberate choice to hire all our nurses as W-2 employees because we believe it’s the best way to support the professionals on our platform. Let’s break down what these classifications mean for you.
What is a W-2 Employee?
When you work as a W-2 employee, you are in a traditional employer-employee relationship. Your employer is responsible for a range of things that provide you with stability and a safety net.
- Tax Withholding: Your employer calculates and withholds federal, state, and local income taxes from your paycheck, so you aren't faced with a large, unexpected tax bill at the end of the year.
- Employer-Paid Taxes: Your employer pays their share of your FICA taxes (Social Security and Medicare), which is 7.65% of your income.
With Humla, you get the flexibility of choosing when and where you want to work, combined with the security and protections that come with being a W-2 employee.
What is a 1099 Independent Contractor?
When you work as a 1099 independent contractor, you are essentially running your own business. You are considered self-employed. While this can offer a high degree of autonomy, it also comes with significant financial and administrative responsibilities.
- Full Tax Responsibility: As a contractor, no taxes are withheld from your pay. You are responsible for calculating and paying your own income taxes, which often requires making quarterly estimated payments to the IRS.
- Self-Employment Tax: You are required to pay the entire FICA tax contribution (15.3%) yourself. This is known as the self-employment tax, and it's double what a W-2 employee pays.
- No Safety Net: Independent contractors are typically not eligible for unemployment benefits or workers' compensation insurance from the company that pays them. You also need to secure your own liability insurance.
Key Differences at a Glance
|
Feature |
W-2 Employee (Humla) |
1099 Independent Contractor |
|
Taxes |
Employer withholds taxes and pays 7.65% of your FICA taxes. |
You are responsible for paying all income taxes and the full 15.3% self-employment tax. |
|
Benefits |
Eligible for workers' compensation and unemployment insurance. |
Not eligible for employer-provided unemployment or workers' comp. |
|
Paycheck |
Consistent, predictable pay with taxes already handled. |
Gross pay is higher, but you must set aside a significant portion for taxes. |
|
Support |
You are part of a team with legal and administrative support. |
You operate as a solo business owner. |
Why We Chose the W-2 Model
As a company founded by a nurse, we have a deep understanding of the profession. We believe nurses deserve both flexibility and security. By classifying our nurses as W-2 employees, we provide a crucial safety net and financial stability that allows you to focus on what you do best—caring for patients.
Choosing the W-2 model means we invest in our nurses. It simplifies your taxes, saves you money, and ensures you have protections in place. You get the freedom to control your career without the risks and administrative burdens of being a contractor. It's the right thing to do, and it reflects our commitment to putting nurses first.