W-2 Employee: Pros & Cons
W-2 Employee - Pros:
Taxes withheld for you - no quarterly estimates or self-employment tax burden
Access to paid sick time (legally required in NY)
Eligibility for Workers' Comp and Unemployment Insurance
Often includes continuing education support or stipends
You're covered under labor laws (non-discrimination, harassment protection)
No need to market yourself or manage client billing
More mentorship and growth opportunities in structured environments
W-2 Employee - Cons:
Hourly rate may look lower up front
Less flexibility in choosing your schedule or rates
May be limited to teaching only at that studio
Independent Contractor (1099): Pros & Cons
Independent Contractor - Pros:
Higher hourly rate on paper - often $5-$15/hr more than employee rate
Total control over your schedule
Ability to work at multiple studios or with private clients
Eligible for business write-offs (travel, training, etc.)
Entrepreneurial freedom to build your own brand
Independent Contractor - Cons:
You pay 15.3% self-employment tax (Social Security + Medicare)
No paid sick leave or PTO
Not protected by labor laws
You must invoice, manage scheduling, and pay taxes quarterly
No continuing ed stipends or support unless you pay out of pocket
No eligibility for unemployment if you lose work
Real World Examples with *Sample numbers
*Actual numbers differ -these are just samples
Scenario A: EMPLOYEE
W-2 employment ($30/hr, 25 hrs/week + 1 weekly class @ $50)
W-2 Employee @ $30/hr
Base Pay: $40,040/year
Statutory Benefits (Employer Paid): $5,946
Employer Paid Sick Pay (35 hrs @ $30): $1,050
Continuing Ed Stipend: $250
→ Total Compensation: $47,286/year
→ Effective Take-Home Rate: $36.37/hr
Scenario B: CONTRACTOR
Independent Contractor ($40/hr, 25 hrs/week + 1 weekly class @ $50)
1099 Contractor @ $40/hr