As the Director of Human Resources at Lighthouse Therapy, I’m often asked about the key differences between being a W-2 employee versus a 1099 independent contractor. Let’s take a closer look at these two common employment classifications and the implications for therapists.

W-2 Employees: Stability and Benefits

A W-2 employee is the more traditional type of work arrangement. As a W-2 employee, you’re hired at an hourly or salaried rate and receive training from the company. Some of the potential benefits of this structure include:

• Employer-provided benefits like health insurance, retirement plans, and paid time off
• A consistent, year-round schedule with a set salary or hourly wage
• Less responsibility for managing taxes and other financial obligations

However, W-2 employees also have less flexibility in their schedules and workloads, as they’re expected to adhere to set hours and accept assigned tasks.

1099 Independent Contractors: Flexibility and Autonomy

In contrast, 1099 independent contractors are considered small business owners. As a 1099 contractor, you’ll invoice for your services and enjoy a number of benefits, such as:

• Increased control over your schedule and caseload
• The ability to work for multiple organizations simultaneously
• More tax deduction opportunities, like home office expenses

The tradeoff is that you’ll be responsible for managing your own taxes, benefits, and retirement planning as an independent contractor. This requires a higher degree of organization and financial savvy.

Evaluating the Best Fit for You

When deciding between a W-2 or 1099 arrangement, it’s important to carefully consider your personal preferences and financial situation. Ask yourself questions like:

• How much control do I want over my schedule and caseload?
• Do I need the stability of a set salary and employer-sponsored benefits?
• Can I effectively manage the administrative and financial responsibilities of contracting?

There’s no one-size-fits-all answer – the best choice will depend on your unique circumstances and career goals.

Ultimately, Lighthouse Therapy is committed to supporting therapists in whichever employment model they choose. While at Lighthouse Therapy, we only employ 10-99 therapist contractors, if you believe that W-2 is a better fit for you, we wish you the very best!