Hi,

I want to know the difference between compesation in W2 and
Corp-to-corp when working as a consultant for a company.

For eg: if my comp rate is 40$/hr W2 for 1st case and
40$/hr corp to corp for second, in which case am I supposed to take care
Of my taxes? :confused:

Wildtype:

If it's W-2, then you are considered an "employee" of the paying corporation. They would be responsible for one-half of the FICA taxes, which would mean you would pay 7.65% and they would pay 7.65%.

If it's corp-to-corp, then the payment would be considered accounts receivable by your corp. How much of the $40 hourly rate you would actually get would depend on a variety of variables too numerous to go into here.

Hello

I need some help regarding salary disputes with employeer.

I am on H1B and started on the project after initial bench period of 3 months. For those three months, first month, my employer did not paid any thing except $400 for monthly expences. Second and third month he paid me @30K / anum whereas LCA says ~45K/anum. He promised me to pay the difference after I got the project. He did not gave me any written confirmation but he promised verbally.

I am planning to resign the company now and just wanted to see if I can recover any balance amount from him. That is second interest but my first interest is to let DOL know about this and save consultants who have faith on this company and coming from India.

I do not want to hire any lawyer for this. My questions are .

1. How can I approach DOL ? Do they have any forms / applications to be filled in?

2. If I complaint against this employer then will that affect my credit history ? Or will it affect my H1B transfer process which is in progress right now ?

Thank you
Nilesh

Answered on next post!

Hello

I need some help regarding salary disputes with employeer.

I am on H1B and started on the project after initial bench period of 3 months. For those three months, first month, my employer did not paid any thing except $400 for monthly expences. second and third month he paid me @30K / anum whereas LCA says ~45K/anum. He promised me to pay the difference after I got the project. He did not gave me any written confirmation but he promised verbally.

I am planning to resign the company now and just wanted to see if I can recover any balance amount from him. That is second interest but my first interest is to let DOL know about this and save consultants who have faith on this company and coming from India.

I do not want to hire any lawyer for this. My questions are .

1. How can I approach DOL ? Do they have any forms / applications to be filled in?

2. If I complaint against this employer then will that affect my credit history ? or will it affect my H1B transfer process which is in progress right now ?

thank you
Nilesh

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Ans:

This is not an isolated incident, at least he has paid you some money. If you got ahead with complaining this issue, you will have a negetive credit rating with other employers. The best option is to find an employer who is credible and has a good stand in this industry. For e.g.. iGate, Marlabs... they have recruiters who work hard to get you a project, some other companies also do the same but I am not sure of most of them.

The best thing to do at the moment is to get a contract, and meanwhile look for employers. I will try to get you some projects, you can contact me -- [email protected]

Diffence between w2 and corp-to-corp

W2 is a type of employment where you being an employee of the broker selected by your client works on a direct pay role of the company and your wages are subject to the same tax withholdings as that of a regular employee.

Corp-to-Corp means that your client, a corporation, pays your business which is organized as a corportation, for the services rendered by you.

The difference is that W2 has two characters and corp-to-corp has twelve. Hope it helps.

<br>

Your W2 has a tax rate (Assuming 90K plus annually) of 26 to 33%. You will have to pay an additional 7.5% as self employed to whatever your tax, Social Security is.

Market rate, as a contractor, when you go through a company has a 30-50% markup so, if your hourly rate is $70 , on a W2 the company you are working for is charging cost Plus or ~$100-140 per hour.

Points:
- If you go Corp to Corp you have to pay quarterly taxes or get penalties from the govt. So, many will hire tax accounts to do it.
- If you keep insurance (and you should), it is generally more expensive than through a company.
- The more you make, the more you need tax breaks, hence 401k is nice to have because it allows for pretax deductions. If you have your LLC (corp to corp)check out small business 401k's like through COSCO.

Liz

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