← Remote Work Glossary

W-2 Employee

A US term for a formal employee whose taxes are withheld by the employer, as opposed to a contractor.

A W-2 employee (named after the US tax form) is a regular employee: the company withholds income tax, pays part of their payroll taxes, and typically provides benefits like health insurance and paid time off. In return the worker follows the employer's direction and schedule.

The alternative is a 1099 contractor, who handles their own taxes and benefits. The distinction affects pay, security and legal protections, so it matters when weighing a US remote offer.