C2C vs W2: how to compare contract rates
A C2C rate and a W2 rate aren't comparable dollar for dollar. On W2, the employer pays half of your payroll taxes and usually provides health insurance, paid time off and sometimes a 401(k) match. On C2C your own corporation pays for all of that.
What a C2C rate has to cover
- The employer half of payroll taxes (7.65% of pay).
- Your health insurance.
- Weeks you're not billing: vacation, holidays and gaps between contracts.
- Business costs: accounting, insurance, fees.
A quick rule of thumb
A W2 hourly rate is often worth roughly the C2C rate times 0.75 to 0.85, depending on benefits and how many weeks you bill. For your own numbers, use the free C2C vs W2 calculator.
This is general information, not tax or legal advice.