A W-2 employee is an individual who is formally employed by a company or organization in the US and receives a W-2 tax form each year to report their income and taxes withheld. W-2 employees are considered "employees" rather than "contractors" or "freelancers" and are entitled to certain benefits and protections under US law, such as health insurance, paid time off, unemployment, and workers compensation insurance. The W-2 form is a tax form that reports the amount of money an employer paid to an employee and the amount of income tax that was withheld from their wages. Employers provide a completed W-2 form for every employee on their payroll, but not for independent contractors (contractors use Form 1099-NEC instead). W-2 employee benefits refer to the non-monetary compensation an employer provides for W-2 employees on their payroll, such as FICA taxes, worker’s compensation, unemployment insurance, and health insurance. In contrast, independent contractors receive a 1099 form to report their income on their tax return and are not entitled to the same benefits and protections as W-2 employees.