W2 vs C2C for H-1B Visa Holders: Which Employment Mode Is Best for Career Growth in USA?

For H-1B visa holders, choosing between W2 and C2C is essential for their career growth and financial stability. There are two options for H-1B visa-holding candidates, to work in the US they can either choose to work as W2 or C2C contracts.

Most candidates do not understand the essential difference between the two. The right choice will depend on what the candidate expects from their career and what kind of growth they see in the US. Through this blog let us understand the difference between C2C and W2 employment of H-1B visa holders.

What are The Difference Between W2 and C2C

What is W2?

Under the W2 employment type, the employee is working directly with the company. In this case, the company is liable to take all expenses of the employee including taxes, Social Security, Medicare, etc.

W2 employees also enjoy benefits in the long run including health insurance, retirement plans, paid time off and unemployment insurance. H-1B visa holders highly prefer this option as it is more stable financially.

What is C2C?

Unlike W2, C2C is much more complicated as the employee is not working directly for the company. In this arrangement, employees are hired on a contractual basis by a third party that provides their services to clients. When compared to W2, C2C does not handle the employee's taxes, insurance, or visa sponsorship.

This model is preferred by professionals seeking extra income with flexibility of time. The only drawback in this mode of employment is that the H-1B holder has to take the responsibility of abiding by visa regulations.

W2 vs C2C: Key Differences and What To Choose?

1. Taxation:

W2 employees do not have to worry about their taxes as all their taxes are automatically managed by the company. Whereas C2C visa USA employees have to manage their own taxation which includes Social Security, Medicare contributions etc. According to this difference, C2C employees have to manage their own taxes and often end up hiring an accountant for the same.

2. Benefits:

W2 employees enjoy the benefits of health insurance, visa sponsorship, paid time off work, retirement plans, etc. However, in the case of C2C employees, the company does not provide these benefits.

3. Stability:

W2 employees tend to stay and work in the US for a longer duration due to the benefits associated with the same. C2C employment is more of a temporary solution to earn a passive income on the side.

4. Flexibility:

Under C2C visa USA the employee or the H-1B visa holder has a lot more options to choose from including their clients, who they wish to work with etc. But in the case of W2 jobs, there is no flexibility and the employee is expected to do what they are told.

 

Advantages and Disadvantages of W2 vs C2C

Pros of W2

1. Employee receives visa sponsorship, renewals and compliance are all taken care of by the company and they do not have to invest any money in the same.

2. Employees receive regular pay checks along with benefits including healthcare, retirement plans and paid time off.

Cons of W2

1. The salaries of these employees are fixed and there is little to no negotiation allowed and there is the absence of flexibility when it comes to choosing their clients and deadlines.

Pros of C2C

1. C2C visa USA employees have a higher potential of earning as they have the flexibility of choosing the rate of the project and earning per hour.

2. The employee has more flexibility as they can choose their projects, clients as well as deadlines.

Cons of C2C

C2C employees do not enjoy any benefits and have to finance their own taxes, visa sponsorship, health insurance, etc

Conclusion

 

Now that we have reached the end of this blog, it is easier to say that choosing between C2C and W2 jobs for H-1B visa holders is not that difficult. The pros and cons of the two types, W2 vs C2C jobs have been laid out and compared for a better understanding of the candidate. W2 has several long-term benefits along with stability.

Whereas the C2C employment type has more flexibility, higher potential for earning and much more. After comparing the advantages and disadvantages of the two, the H-1B visa holder can make an informed decision for the growth of their career in the right direction.


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