Working in America
Reading a US offer letter, W-2 vs 1099, benefits elections
A US offer letter and your first payslip contain terms and deductions that are not obvious to newcomers. This guide explains how to read both: the difference between W-2 employment and 1099 contracting, what each means for taxes and benefits, and why your take-home pay is well below your gross salary.
What you’ll learn
- W-2 employee vs 1099 contractor: the tax and benefit consequences
- Reading an offer letter: the clauses that matter
- Benefits elections: health, 401(k) match, FSA/HSA
- The W-4 and how federal and state withholding are set
- FICA (Social Security and Medicare) on your payslip
- Why gross salary and take-home pay differ so much
- Checking a payslip line by line for errors
It walks through benefits elections (health plans, 401(k) and employer match, FSA/HSA), federal and state withholding and the W-4 form, FICA taxes, and how to sanity-check a payslip line by line. It also flags the offer-letter clauses worth understanding before you sign.
Educational content only, these guides are not legal advice.Read the full disclaimer →
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