Understanding the Difference Between W-2 and 1099 as a School Therapist
As a school traveler, you might find yourself presented with the option to classify as either a W-2 employee or a 1099 independent contractor by your employment agency. Each employment classification possesses its own benefits and challenges—just like each individual has unique circumstances in choosing one.
If you are in a position to choose your employment classification, it’s imperative to understand the implications of your decision for factors like taxes, benefits, licensure, professional liability coverage, and mentorship.
W-2 vs. 1099 with a School Staffing Agency
To give you a clearer picture of how different classifications work within the structure of a school staffing agency, we’ve outlined comparisons between W-2 and 1099 across five different categories relevant to all school travelers while on assignment:
Taxes
How it works with W-2
With W-2 status, you are an official employee of the agency or company you are on assignment with. As a direct employee, you will have taxes allocated for you through your employer’s payroll after filling out a W-4 tax form when you are hired. When taxes are due, you will file a W-2 form from your employer to determine what taxes you owe or your tax refund.
How it works with 1099
As a 1099 independent contractor, you are not a direct employee of the agency or company you are working with. When you are hired, you will fill out a W-9 tax form and your paychecks will be untaxed for the duration of your contract. So, when taxes are due, you will need to self-report your wages with a 1099 form and ensure you have enough money to pay your corresponding taxes—including an additional self-employment tax. Essentially, you are getting more per paycheck but need to set money aside as you will eventually owe those taxes upon filing.
Benefits
How it works with W-2
As a W-2 employee, you will have access to all the employment benefits offered by your agency. While the specifics might differ across different agencies, these benefits can include health insurance, retirement planning, career support, and additional perks determined by the company. Having these benefits in hand provides personal and financial security, while also limiting you to the options available through your employer.
How it works with 1099
As a 1099 independent contractor, you are self-employed and unable to access the benefits your agency offers regular employees. Therefore, you are in charge of finding your own insurance coverage and other benefits without the safety net of your company’s support. This can be a confusing and expensive undertaking for inexperienced independent contractors but does provide the freedom to customize your benefits without company limitations.
Licensure
How it works with W-2
As a W-2 employee, you are responsible for obtaining any relevant licenses and credentials that are prerequisites to working in your school district. However, many agencies provide licensure assistance to employees, with some offering licensure reimbursement to help save on related costs.
How it works with 1099
As a 1099 independent contractor, you are also responsible for obtaining any relevant licenses and credentials that are prerequisites to working in your school district. Like other employment benefits, the licensure process and cost will fall to you as you prepare for each school assignment.
Professional Liability
How it works with W-2
As a W-2 employee, your employment benefits will include company-provided coverage for situations that may occur while you’re on the job as a service provider—including workman’s compensation, professional, and general liability.
How it works with 1099
As a 1099 independent contractor providing services as a self-owned business, you are responsible for finding and paying for your own workman’s compensation, professional, and general liability coverage to keep yourself protected from damages that may occur in the workplace.
Mentorship
How it works with W-2
As a W-2 employee, you will have access to a recruitment team who understands your unique interests and is directly responsible for proactively finding job opportunities or rebooking assignments. Many agencies offer additional personal and career assistance through clinical support teams, credentialing and onboarding, housing, and dedicated mentorship to guide you toward your goals.
How it works with 1099
As a 1099 independent contractor, you do not have access to the same career mentorship and support systems that an agency provides to regular employees. While you have the freedom and flexibility to work wherever and whenever you want, you must make any big-picture career decisions without employer guidance.
We hope these comparisons give you a deeper understanding of the fundamental differences between W-2 and 1099 employment. Bottom line: There is no wrong employment status to choose but remember the key benefits and drawbacks of each before you decide on your school staffing agency.
