Job DutiesĮmployees are hired by their employers for various job duties and tasks, while subcontractors are engaged to carry out a specific job within their specialty defined by the contract. Subcontractors are paid per project and are responsible for their taxes and insurance. Employees receive benefits from employers such as vacation time, holiday pay, and pension plans. Wages, Taxes, and BenefitsĮmployees receive hourly pay or salaries from their employers, and the employers withhold payroll taxes from their pay. Some key differences between the two include: Tools and MaterialsĮmployees are given tools and equipment by their employers, while subcontractors typically own them and bring them to the job site. The subcontractor is an independent contractor carrying out services for the primary contractor. The primary difference between an employee and a subcontractor is that the employee works for the company. They are independent entities working for themselves, not the general contractor.
Subcontractors may be freelancers, contractors within their area, or product vendors.
The most common example is in construction, where the general contractor schedules and budgets the entire project and then subcontracts with carpenters, electricians, plumbers, and others to complete the project. What Should a Subcontractor Agreement Include?Ī subcontractor is an individual or company that works in a specialized industry and provides services to a contractor for a fixed fee.
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