W-2 vs 1099: Employee or Contractor, and What Each Form Means
Updated 2026-10-03 · EZStub by Buy One Media LLC
A W-2 employee has income tax, Social Security and Medicare withheld by the employer, who also pays the employer share of FICA and reports wages on Form W-2. A 1099 contractor is paid without withholding, receives Form 1099-NEC when paid $2,000 or more in 2026, and pays income tax and self-employment tax on their own.
Side by side
| W-2 employee | 1099 contractor | |
|---|---|---|
| Taxes withheld from pay | Yes: federal, state, Social Security, Medicare | No |
| Who pays Social Security and Medicare | Split between employee and employer | The contractor pays both halves (15.3%) |
| Year-end form | Form W-2, due January 31 | Form 1099-NEC if paid $2,000+ in 2026, due January 31 |
| Form given to the payer when hired | Form W-4 | Form W-9 |
| Pays estimated taxes | Usually not | Usually yes, with Form 1040-ES |
Who decides?
It depends on the working relationship, not on what the parties call it. The IRS looks at behavioral control, financial control and the relationship of the parties. Misclassifying an employee as a contractor can lead to back taxes and penalties, so check IRS guidance or ask a tax professional when in doubt.
Questions
Can someone get both a W-2 and a 1099?
Yes, from different payers, or from the same business for genuinely different work. Each form covers its own type of payment.
Do contractors get pay stubs?
Contractors are usually paid against an invoice rather than through payroll. Many keep an invoice or payment record for each payment so their income is documented.
Related
This guide is general information, not tax or legal advice. EZStub creates documents for your records from the figures you enter; it does not file or pay taxes. Pay stubs must reflect pay that was actually made.