My prospective employer (a consultancy service) gave me 3 options: signing on as 1099, W2 w/ benefits or W2 all inclusive. The "all inclusive" option means that my benefits are paid in my paycheck instead of having health insurance and such.

I chose the W2 all inclusive option, as I have health insurance through my husband's job and figured it would be nice to have that money in my pocket instead of going to pay for benefits that I won't use.

The problem is, I cannot find any reference to this practice on the Internet and I wanted to find out if this was common, legal or recommended.

  • Can you post the actual amounts they offered for each situation? Without knowing the amounts, it's impossible to say whether your choice was a 'good' idea. (And you can divide them all by the same arbitrary number to keep them private) Commented Feb 2, 2011 at 15:25
  • what does it mean? 40 / hr on W2 (all inclusive) Commented May 31, 2017 at 20:55

1 Answer 1


It's hard to answer without knowing all of the details (i.e. what was your salary for each of the options), but I think you probably made a good choice.

1099: Would have required you to pay self-employment tax, but also would have allowed you to deduct business expenses.

W2 with benefits: Likely would have been beneficial if you needed healthcare (since group plans can be cheaper than individual plans, and healthcare payments aren't taxed), but if you don't use the healthcare, that would have been a waste.

W2, no benefits: Assuming your salary here falls between the 1099 and the W2 with benefits, it seems like a good compromise for your situation.

  • 2
    Group health care plans are not always cheaper than individual. I have an individual plan now and pay half of what my employer paid. Group plans spread the risk across a group and cover pre-existing conditions. So if you are in good health i am almost certain it will be cheaper as an individual. This article confirms: cashmoneylife.com/2009/11/18/… BUT benefits are usually a little worse
    – Vitalik
    Commented Feb 2, 2011 at 13:48

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .