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Subcontractor example For example, a building contractor may hire a subcontractor to complete the electrical wiring part of the contractor's building job. The contractor is responsible to the client for the building job including the part performed by the subcontractor.
1. Is there a difference between an employee and a subcontractor? If a worker is an employee you are responsible for withholding and paying the employment-related taxes. If your worker is a subcontractor, he is responsible for keeping his or her own records and paying his or her own income and self-employment taxes.
The main difference lies in who isemploying the person. If a worker is employed by a company directly, they are an independent contractor. If the worker is hired to perform a specific task for a general contractor, they are a subcontractor.
A subcontractor agreement ensures transparency between both parties and defines each party's roles, responsibilities, and rights.
Sub-contractor agreements are formal written documents that outline the terms and scope of work for the sub-contractor in a project. They spell out the duties of the contractors and subcontractors and how they should relate with each other until the project is concluded.