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Glossary Entry • Letter W

Form W-2 vs. Form 1099-NEC

Tax forms distinguishing traditional statutory employees (W-2) from independent contractors (1099-NEC).

Detailed Explanation & Employer Guidance

Employers issue Form W-2 to employees detailing annual earnings and taxes withheld (federal income tax, Social Security, Medicare, state and local taxes). Form 1099-NEC is issued to independent contractors paid $600 or more in nonemployee compensation, who are responsible for paying self-employment taxes directly.

Automate Compliance with Paylocity

Never worry about manual misclassifications or regulatory calculation errors. Paylocity keeps your workforce policies and payroll engine up to date with changing state and federal laws.

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