Before you hire, know the true all-in cost difference between a W-2 employee and a 1099 contractor.
Gusto handles payroll taxes, benefits, onboarding, and compliance automatically. Starts at $46/month. 30-day free trial — no credit card required.
Try Gusto Payroll Free for 30 Days →W-2 Employee hidden costs: You pay 7.65% FICA (SS + Medicare), unemployment (FUTA ~0.6%), workers' comp, plus benefits (health 15-20%, retirement match 3-5%, PTO ~8%).
1099 Contractor risks: No IP ownership guarantee, can't direct how work is done, no non-compete enforcement, IRS misclassification penalties up to 35% of wages.
Rule of thumb: A contractor billing 1.3-1.5× the equivalent salary often costs the same as an employee after benefits.