Is a subcontractor self-employed?

Is a subcontractor self-employed?

Is a subcontractor self-employed? The answer to this question depends on a variety of factors. A subcontractor is generally considered self-employed if they’re running their own business, providing services to other businesses, and controlling the way in which their work is completed. However, there are some additional considerations that can complicate things. 

In this article, we’ll look at what makes someone a subcontractor, the legal difference between employees and self-employed workers, and what to consider when deciding how to classify a worker.

What is a construction subcontractor?

A construction subcontractor is a person or business hired by another company to complete specific tasks or services. They’re typically paid on an hourly basis and are responsible for providing their own materials and equipment, as well as doing any taxes.

So is being a subcontractor like being self-employed? Typically, yes, but first, we’ll need to go over what it means to be self-employed.

What does it mean to be self-employed?

The legal definition of self-employment varies from country to country, but it generally refers to someone who runs their own business and is responsible for their own taxes. In the US, self-employment is generally defined as any activity that involves an individual working independently or in a partnership to generate income. 

The legal distinction between employees and self-employed workers is important because it determines what type of taxes are owed and how benefits are handled. 

For example, employees are typically eligible for certain benefits like health insurance and retirement plans, whereas self-employed workers do not receive those same benefits. It’s crucial to understand this distinction when deciding how to classify a worker.

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Is a subcontractor considered self-employed?

When determining if a subcontractor is considered self-employed in the eyes of the law, there are a few factors to consider. These may include:

  • If the subcontractor is able to negotiate their own rates
  • Whether or not they provide their own materials and equipment
  • If they’re responsible for paying their own taxes

Here are a few other things to consider when deciding how to classify a worker.

The relationship between the two parties

It’s vital to determine the exact nature of the relationship between the two parties. Generally speaking, a self-employed subcontractor is hired on a project-by-project basis and provides services for a short period of time, while an employee is expected to perform duties as part of a longer-term employment agreement.

Consider the amount of control the hiring party has over the self-employed subcontractor or employee. Employers are usually able to exercise greater control over employees due to the nature of their long-term commitment, while subcontractors typically have more autonomy and control over their work.

The amount of specialization required

It’s also important to consider the level of skill and expertise required for a particular job, as subcontractors are usually hired for specific roles that require specialized knowledge or experience.

In summary, when it comes to the question of “Is a subcontractor self-employed?”, it’s possible for a subcontractor to be self-employed, depending on the individual’s circumstances and the legal definitions of self-employment in their particular country. Careful consideration must be taken during classification to ensure that all applicable regulations are followed.

The benefits of hiring a self-employed subcontractor

Hiring a self-employed subcontractor rather than a full-time employee can offer a variety of benefits for businesses.

Decreases costs

For one, it allows the company to reduce their overall payroll costs since they’re only paying the subcontractor for specific tasks or services. This is especially beneficial in cases where certain services don’t need to be performed regularly and only require part-time attention.

Because self-employed subcontractors are not considered employees, companies also do not need to provide certain benefits like health insurance or retirement plans.

If you’re wondering, “Is a subcontractor considered self-employed for taxes?”, the answer is yes. Businesses will save time and money in this regard, as self-employed workers are responsible for paying their own taxes. This means the company does not have to worry about filing additional paperwork or dealing with any of the complexities of employment tax laws.


Self-employed subcontractors are also typically more flexible than full-time workers, since they usually have no set schedule and can make changes to their workload as needed. This allows businesses to adjust their needs as the market demands without having to make any long-term commitments or hire additional employees.

The risks of hiring a self-employed subcontractor

Now that we’ve gone over the question of “Is a subcontractor self-employed?”, it’s critical to also consider that, despite the numerous benefits of hiring a self-employed subcontractor, there are some risks involved as well.

More due diligence required

Since self-employed workers are not considered employees, these workers do not receive any legal protection or benefits from their employers and may be vulnerable to exploitation. Companies should take care to ensure that all applicable laws and regulations are followed when it comes to self-employment, such as ensuring that they’re paid in a timely manner and that they receive compensation for any additional work performed.

Additionally, self-employed subcontractors may not be held to the same standards as full-time employees when it comes to deadlines or quality of work. It’s crucial to create a clear agreement between both parties so that expectations are established and the subcontractor is held accountable.

Lack of reliability

Even with agreements in place, self-employed subcontractors may not always be as reliable as full-time employees due to their flexible nature and lack of job security. Companies should make sure to do thorough background checks on any potential workers to ensure that they can rely on them to perform their duties in a timely and satisfactory manner.

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There are numerous benefits and risks to being a self-employed construction subcontractor. It’s essential for hiring parties to consider all relevant factors when determining whether someone should be classified as self-employed. We hope this article has answered the question, “Is a subcontractor self-employed?”
Need help managing your workers? Consider using Bridgit Bench, a workforce management solution that allows users to track project progress and oversee construction personnel. Request a demo with Bridgit today.

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Michel Richer

Michel Richer is the Manager of Content and Product Marketing at Bridgit. He started in the construction industry early on with a local restoration company. Michel is driven to propel the construction industry forward by helping to eliminate outdated, ineffective processes.

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