What is a Subcontractor Agreement?
A Subcontractor Agreement is a legal document which allows you, as a contractor, to engage with a sub-contractor for the provision of services.
It covers all of the important aspects of the agreement, including services, payment, confidentiality, termination and limitation of liability.
It helps to set the ground rules so that both parties can understand their obligations from the start.
Do I need a contract?
Yes, absolutely! A contract protects both you and your subcontractors.
You should always have a contract signed before work starts.
You need a proper written contract to enforce your rights and make sure your business is legally protected in case something goes wrong.
Our Subcontractor Agreement template will help you avoid misunderstandings and disputes.
Are there any other names for a Subcontractor Agreement?
Yes, you might have also heard this document referred to as an Independent Contractor Agreement or Subcontractor Contract.
All of them are basically the same thing, just different names for the contract you use to hire a contractor.
What does this Subcontractor Agreement template include?
Our Subcontractor Agreement template covers everything you need:
★ Scope of Works
★ Fees & Expenses
★ Obligations of Subcontractor
★ Warranties and Indemnity
★ Intellectual Property
★ Dispute Resolution
Differences between an employee and a contractor
Whether you are an employee or a contractor depends on many different factors.
Independent contractors generally:
🔹 work for themselves and are their own boss
🔹 are free to accept or refuse work
🔹 control their own working times
🔹 provide their own tools and equipment
🔸 work in someone else’s business
🔸 are subject to controls on how, where and when they do their work
🔸 are paid a wage
🔸 receive employee entitlements, such as sick and annual leave
Any other requirements?
Subcontractors are self-employed individuals or companies that work on a part of a contract between a head contractor and a client. To legally operate as a subcontractor in Australia you will need to register for a Tax File Number (TFN), Australian Business Number (ABN) and in certain circumstances you will need to register for Goods and Services Tax (GST).
Still not sure about the difference?
We recommend you visit the Fair Work Ombudsman website to read more. If you’re an employer, visit the ATO’s website to learn the tax and super obligations for both employees and contractors, and read more about the differences between them.
What is sham contracting?
A sham contracting arrangement is when an employer attempts to disguise an employment relationship as an independent contracting arrangement. This is usually done to avoid paying employee entitlements. Even if you make an innocent mistake, you can still be fined!
If you’re convicted of sham contracting, you could be hit with a fine of up to $12,600 as well as back-payment of wages and entitlements.
This agreement makes it crystal clear that you have a true Independent Contractor arrangement.
How do I include all of the details for the job in the contract?
We have included a Schedule in the contract where you can write down all of the specific details of the services or project. This includes things like job description, start date, services to be provided and fees.
If you have any questions about how to fill this out, you’re welcome to Contact Us.
Does the subcontractor get paid a fixed fee, or an hourly rate?
It’s up to you to negotiate fees with the subcontractor.
For a specific project, you might like to have the cost certainty of a fixed fee, but it’s very common for contractors to charge out at an hourly or daily rate.
How do I stop a subcontractor from taking my clients, or competing with my business?
We have included a Restraint clause in our Subcontractor Agreement template to prevent the subcontractor from taking clients or employees away from your business, or competing with your business.
Can I terminate the agreement for non performance?
Yes you can.
Our template includes a detailed Termination clause which allows you to terminate for non performance or failing to meet key responsibilities listed in the agreement.