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What qualifies you as a subcontractor?

A subcontractor is a worker who is not your employee. You give a Form 1099 to a subcontractor showing the amounts you paid him. The subcontractor is responsible for keeping his or her own records and paying his or her own income and self-employment taxes.

What is the difference between independent contractor and subcontractor?

Where independent contractors are usually jacks-of-all-trades, subcontractors most often specialize in a specific aspect of a project. Rather than being directly hired by the client, theyre called in by independent contractors to perform certain tasks, such as roofing and siding, electric work, plumbing, or tiling.

Why do companies hire subcontractors?

Ultimately, subcontracting lets you focus on whats most important to you: your business. By hiring professionals to handle the tasks you are less good at, you can use your time and energy more strategically. You will have less to manage because your project will be coordinated by professionals who know their job.

What does it mean to be hired as a subcontractor?

Instead of a fixed cost like an employee, a subcontractor is a variable cost. With a seasonal subcontractor, you dont have to worry about meeting payroll when theres no work coming in. For the subcontractor, the main benefit would be the potential for tax deductions that are not available to employees.

What is an example of a subcontractor?

Examples of Subcontractors Subcontractors are individuals with special skills. In construction projects, contractors will hire subcontractors who specialize in different aspects of the project, such as plumbing, electricity, painting, etc.

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