Is It Better To Be a W-2 Contractor or Employee?

As the gig economy expands, many professionals are considering the benefits of contract work over traditional employment. While both W-2 employment and contract work have their advantages and disadvantages, there are several reasons why W-2 work as a contractor may be a better option for some individuals.


One of the primary advantages of W-2 work as a contractor is the flexibility it offers. Contract work is often project-based, allowing contractors to work on various assignments and gain exposure to different industries and job functions. In addition, contractors can set their schedules and work from wherever they want, providing more flexibility for those who need to work around other commitments. This flexibility can be especially beneficial for individuals with family, educational, or personal obligations requiring a more flexible schedule.

Career Growth and Advancement

W-2 work as a contractor can offer more career growth and advancement opportunities. Employees who work for a company are often limited by the options available within the organization. As a contractor, they can work with different clients and gain exposure to various industries, which can help them build a broader skill set and open up new career paths. This can be especially beneficial to individuals who are looking to expand their skill set or who are looking to transition to a new career.

Higher Pay

Another significant benefit of W-2 work as a contractor is the potential for higher pay. Employees who work for a company are responsible for various employment costs, including payroll taxes, benefits, and insurance. The individual is responsible for these costs as a contractor, but they can also set their rates and negotiate their contracts, often resulting in a higher net income. This higher pay can be especially attractive to individuals with specialized skills or who work in industries with high service demand.


Working as a contractor can ultimately provide more control over work-life balance. Employees who work for a company are expected to be available during certain hours and to perform a set number of hours per week. As a contractor, they can set their schedule and work, which can be extremely helpful for those with other commitments or who wish to maintain a better work-life balance. This can be especially beneficial to individuals who have family obligations or want to pursue other interests outside of work.


While W-2 work as a contractor has many benefits, it’s important to note that there are also potential downsides to this type of work. One of the main concerns with contract work is the lack of stability and predictability. As a contractor, individuals need to seek out new projects and clients constantly, and there’s always a risk that work will dry up. Additionally, contracting work often requires a higher level of self-discipline and organization. As contractors, individuals are responsible for managing their schedules, invoicing clients, and tracking expenses. If they’re uncomfortable with these tasks, they may struggle to succeed as contractors.

W-2 work as a contractor offers many benefits, including flexibility, higher pay, career growth and advancement, and work-life balance. While there are risks and downsides to contract work, many professionals find this type of work to be rewarding and fulfilling. If you’re considering switching to contract work, it’s essential to weigh the pros and cons carefully and take steps to mitigate any potential risks.