Employee vs Contractor: Which Makes More Sense for Per Diem Nurses?

Employee vs. Contractor: Which is Better for Per Diem Nurses?

Are you confused about why you owe so much in taxes every year? For per diem nurses and nursing assistants, the differences in how you are employed for shifts may have a big impact on how much of your money you make.

Understanding tax rules can be very confusing and to avoid additional costly penalties during tax season, you may have to pay accounting fees to properly file your taxes. In this blog, we’ll explain the differences between the employee vs contractor employment models.

Employee vs Contractor Nursing Gigs: What’s the Difference?

The difference between W2 employee and 1099 contract shifts lies in how you are covered by the employer. W2 workers are treated as employees, while 1099 workers are independent contractors.

Understand Who Pays Taxes

Many contractor shifts offer high-paying wages, which can be a big draw for the per diem nurse working week to week. However, 1099 employers don’t cover certain taxes that are covered by W2 employers. When tax time rolls around, 1099 contractors will likely find themselves responsible for those taxes, which often comes as an unpleasant and costly surprise.

It’s important to keep in mind that while a W2 gig may offer a slightly lower rate, that’s largely a result of the W2 employer paying taxes today that a 1099 contractor would otherwise owe come tax season.

W2 Benefits

Unlike 1099, W2 employers consider nurses their employees and have to extend their benefits packages to you. While it depends on the employer, these benefits often include:

  • Healthcare and Dental coverage
  • Life insurance and disability plans
  • Employer-matching 401(k) programs to save for retirement
  • Malpractice insurance 

The last benefit is really important because if anything goes wrong while you’re on the job, the liability falls on the employer and not on you. For nurses and nursing assistants that want less risk, employee work is for you.


Employee vs contractor employment engagements have provided nursing professionals with the freedom to work when, where, and how they want. 

Do you have questions about taxes? Let us help. You can reach out to our Care Team at any time! 


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