A subcontractor agreement is between a contractor and a subcontractor that is hired to complete a task that is part of a larger project. The subcontractor is considered a 1099 independent contractor, not an employee, which means they are liable for the payment of their own Federal and State withholding taxes. A subcontractor is not owed or entitled to anything other than the monetary amount by the hiring contractor. The agreement should include the scope of work, payment details, and upon signing by both parties becomes a legally binding document.

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What is a Subcontractor?

A subcontractor is

Subcontractor vs Contractor

How to Hire a Subcontractor

Hiring a subcontractor, like hiring anyone, involves checking with other past clients to get an idea of how the individual or company operates. The employer of the subcontractor knows they can only mitigate so much of the liability if the subcontractor does not perform as required. Therefore, it’s important to hire someone or a company that has a track record of quality work and completing on a timely basis.

Step 1 – Search for a Subcontractor

Online Resources

  • website 1
  • website 2
  • website 3

Step 2 – Meet with Potential Candidates

Step 3 – Negotiate the Terms

Step 4 – Sign the Agreement and Begin Working

Recommended Clauses



Hold Harmless / Indemnification Clause


Buyout Clause


Insurance / Liability Clause


Employment Relationship (Independent Contractor)


How to Write a Subcontractor Agreement

Download: Adobe PDF, Microsoft Word (.docx)

Step 1