Before signing your contract as a travel nurse, it is important to know about W-2 employees vs 1099 contractors because it is not just a box you check at tax time, but it can impact your financial health. Travel nurses go to different places to provide their services where there is a shortage of staff. If you are a W2 travel nurse, then this means you are the employee of the staffing agency, and if you are a 1099 travel nurse, then this means you are an independent contractor. Before you sign your contract, let’s talk in detail about W-2 vs 1099, pros and cons, and which one is the best for you!
What is the meaning of a travel nurse?
Travel nurses sign contracts to work at the healthcare facilities in different states where there is a shortage of staff. These contracts can vary from a few days to several months, but typically it is 13 weeks.
What is a W2 travel nurse vs a 1099 travel nurse? The differences:
W-2 travel nurse VS 1099 travel nurse
Employee status:
- When you are a W2 travel nurse, this means that you are working for a staffing agency.
- When you are a 1099 travel nurse, this means you are an independent contractor and not working for a staffing agency.
Paying taxes:
- W2 travel nurse’s taxes, such as federal, state, and payroll (social security and Medicare), are withheld from their paycheck. There is less tax work as the agency handles all tax work and sends them a form by the end of the year.
- 1099 travel nurses have to pay their own tax, which includes income tax, self-employment tax (Social Security and Medicare). There is more paperwork as they receive the 1099-NEC form, and they are responsible for tracking their expenses.
Pay and salary:
- W2 travel nurses have lower base pay but more benefits, such as health insurance, paid time off, etc.
- 1099 travel nurses have a higher hourly rate but have a tax burden and no benefits.
What are the pros and cons of a W2 travel nurse employee independent contractor?
Travel nursing with an agency is a W2 contractor, and travel nursing without an agency is known as an independent contractor. Whether you are an independent travel nurse or a W2 travel nurse, both have their advantages and disadvantages.
W2 travel nurse:
Pros:
- No tax burden
- Get benefits such as health insurance, life insurance, paid time off, etc.
- More job security.
Cons:
- Lower base pay as compared to independent contractors.
- Limited tax deductions.
1099 travel nurse or independent contractors:
Pros:
- Higher pay.
- Higher tax deduction, such as travel, licensing, scrubs, etc.
- More flexibility and freedom to choose their assignments.
Cons:
- More tax work/paperwork as they pay their own taxes.
- No benefits.
Which one is better for travel nurses, W2 or 1099?
Both have their own pros and cons, but if you want to have a stable income, more benefits, job security, and less financial work, then W2 is the right option for you. If you want to have higher pay, maximum flexibility in job and tax control then 1099 or becoming an independent contractor as a travel nurse is the right option for you to choose.
What is the to-do list for independent contractors?
- As an independent travel nurse contractor or 1099 contractor, you have to file your own federal, state, and local taxes. They also pay self-employment tax.
- Independent contractors also have to find their own housing.
- The independent travel nurse contractors must secure their own insurance, which is a lot higher without a group.
- Finding a job is another task for independent contractors, and they also have to pay for their compliance costs. This includes screenings, background checks, etc.
- Independent travel nurse contractors are also responsible for billing.
Why is working with SkillGigs the best option for travel nurses?
- It allows the travel nurses to bid directly on jobs, eliminating the middleman, which can save travel nurses a lot of money.
- Higher pay transparency and travel nurses can choose their own assignments based on their financial goals.
- Nurses can keep more bill rates by cutting out the recruiters and experience less pressure for choosing assignments that they don’t want.
- It is an AI-powered platform that matches the nurse’s skills with the job they need.
- Travel nurses have the flexibility to choose their own assignments.
- This platform also allows real-time communication as the nurses can talk directly with the hiring managers.
- SkillGigs also helps manage the documentation, offers a 3D resume, and much more, saving time and repetitive work.
- Nurses have a wide range of opportunities to work across the country.
- Nurses can also check the rating and reviews of the hospital before accepting a job.
Conclusion
Choosing W2 or 1099 (independent contractor) is about how you want to work and live. As W2, you are working for the agency that handles your paperwork, taxes, housing, provides benefits, etc. As an independent contractor, you work independently, choose your own assignments, housing, do your own paperwork work, and tax work. Both have their benefits and challenges, such as with W2, the base pay is low and less deductions. In 1099, the base pay is higher, but there are no benefits, and you have to manage all your tax work, which can be challenging. No matter what you choose but become a travel nurse with SkillGigs. With SkillGigs, you can choose your own assignment and make more money while doing what you love. So, join SkillGigs and become a part of our travel nursing world.
