Add at least one scope item with an amount to preview the agreement.
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Last updated: 2026-05-31
Quick Answer: What Is a Subcontractor Agreement Template?
A subcontractor agreement template is a fill-in contract a general contractor uses to hire a sub. It sets the scope of work, the subcontract sum, payment terms, retainage, insurance requirements, and the standard clauses that move risk to the right party. Fill it out, print it or save it as a PDF, and get it signed before the sub starts. It is the contract version of a scope of work, with teeth.
Why You Need This in Writing
I have seen a handshake deal with a sub turn into a mess more than once. The sub shows up with no insurance, does half the tile, then asks for more money than we ever agreed to. With nothing in writing, you eat the difference. A subcontractor agreement is how you stop that before it starts. It puts the scope, the price, the insurance, and the deadline on one page that both companies sign.
This template builds a clean agreement you can fill out at the desk or on your phone, print for signature, or save as a PDF and email to the sub. It totals the subcontract sum as you add scope items and drops in the standard clauses every contractor should have: insurance, indemnification, lien waivers, retainage, change orders, and termination.
Where it fits with your other documents
Three documents do three different jobs. Your contract with the homeowner sets your deal with the owner. The subcontractor agreement sets your deal with the sub. The scope of work lists the tasks and can be attached as an exhibit. Keep the same project name across all three and the paperwork lines up.
Subcontractor agreement vs scope of work vs prime contract
| Document | Who Signs It | What It Covers |
|---|---|---|
| Prime contract | GC and owner | Whole project, price to the owner, overall terms |
| Subcontractor agreement | GC and subcontractor | Sub scope, price, payment, insurance, liability |
| Scope of work | Attached as an exhibit | The list of tasks the sub performs |
Typical terms contractors set with subs
| Term | Common Range | Notes |
|---|---|---|
| Retainage | 5% to 10% | Released after final completion and acceptance |
| General liability | $1M to $2M per occurrence | Require additional insured status |
| Payment terms | Net 7 to Net 30 | Often pay-when-paid, varies by state |
| Warranty | 1 year minimum | Match the prime contract if it is longer |
Worked example: hiring a drywall sub on a remodel
Say you are hiring a drywall sub for a kitchen and hall on a remodel. Here is how the subcontract sum lays out:
| Scope Item | Amount |
|---|---|
| Hang and finish drywall, kitchen and hall (Level 4) | $3,200 |
| Ceiling texture, knockdown | $650 |
| Patch and blend at existing walls | $450 |
| Subcontract sum | $4,300 |
| Retainage held at 10% | $430 |
| Net due at completion | $3,870 |
Before that sub lifts a sheet, the agreement makes the deal real: $4,300 for the listed scope, 10% retainage, a certificate of insurance naming you as additional insured, and a signed lien waiver with each payment. Need to dial in your own labor numbers first? Run them through the burdened labor rate calculator so you know your real cost before you sign anyone.
From signed agreement to getting everyone paid
The agreement is the start. When the sub bills you, that needs to flow into your own billing and a payment schedule, and any added work needs a signed change order before it happens. Tie it all to the same job and you will not lose track of who is owed what.
EstimationPro carries one job from estimate to proposal to invoice without re-keying anything. You build the estimate, send the proposal, and the system follows up with the homeowner automatically so you win more of the bids you already send. When the work is done, the invoice goes out and gets paid online, so the money you committed to your subs is money you actually collected.
Subcontractor Agreement Guide
How to write, price, and protect a subcontractor agreement that keeps your job, your insurance, and your payments tight.
What Is a Subcontractor Agreement?
A subcontractor agreement is the contract between a general contractor and a subcontractor that sets the scope, price, payment terms, insurance, and liability for the sub's portion of a job. It is the document that protects you when something goes sideways on site.
- Scope of work spells out exactly what the sub is on the hook for
- Subcontract sum sets the price and how change orders adjust it
- Payment terms define when the sub gets paid, often pay-when-paid
- Insurance and indemnification shift the right risk to the right party
It is different from a scope of work, which only lists the tasks, and different from your contract with the homeowner, which is a separate agreement.
Key Takeaways
- Contract between GC and subcontractor
- Covers scope, price, payment, insurance, and liability
- Different from a standalone scope of work document
What Every Subcontractor Agreement Should Include
A usable subcontractor agreement has nine core sections. Skip one and you are exposed when the job goes long or the sub walks.
- Parties with company names, license numbers, and contact info
- Project name, site address, and the prime contract it ties to
- Scope of work with each line item priced
- Subcontract sum and how it changes with change orders
- Payment terms and retainage (commonly 5% to 10%)
- Insurance limits, additional insured status, and workers' comp
- Indemnification and lien waiver requirements
- Schedule with start and substantial completion dates
- Termination, warranty, and dispute resolution clauses
Key Takeaways
- Nine core sections cover the real risk
- Retainage is commonly 5% to 10%
- Require additional insured status and a certificate before work starts
Pay-When-Paid and Retainage Explained
Pay-when-paid means the sub gets paid after the GC is paid by the owner, which protects the GC's cash flow. Retainage is a percentage held back from each payment until the job is done right.
- Pay-when-paid: common, but enforceability varies by state, so word it carefully
- Retainage: usually 5% to 10%, released after final completion and acceptance
- Lien waivers: collect a signed waiver with every payment to keep your title clean
On a clean workflow the subcontract sum, the change orders, and the final lien waiver all tie back to the same job number so nothing slips through.
Key Takeaways
- Pay-when-paid ties sub payment to owner payment
- Retainage of 5% to 10% is released at final completion
- Collect a signed lien waiver with every payment
How to Use This Calculator
Enter Both Companies
Add your company info as the general contractor and the subcontractor company info, including license numbers and the trade they are performing.
Define the Project and Scope
Set the project name, site address, and dates, then list each scope item with a price. The tool totals the subcontract sum as you type.
Set Payment, Retainage, and Insurance
Pick your payment terms, retainage percentage, general liability limit, and workers comp requirement. The standard subcontract clauses fill in automatically.
Preview, Print, or Save as PDF
Preview the formatted agreement with signature lines for both parties, then print it or save it as a PDF to send the sub for signature.
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Frequently Asked Questions
What is a subcontractor agreement?
A subcontractor agreement is the written contract between a general contractor and a subcontractor that sets the scope of work, the price (subcontract sum), payment terms, insurance requirements, and who carries the liability for the sub's portion of a job. It is the document that protects you if the sub walks off, does defective work, or files a lien.
What is the difference between a subcontractor agreement and a scope of work?
A scope of work only lists the tasks the sub will perform. A subcontractor agreement wraps that scope inside a full contract with price, payment terms, insurance, indemnification, schedule, and termination clauses. If you only need to spell out the tasks, use the subcontractor scope of work template. If you need a binding contract, use this agreement.
What should a subcontractor agreement include?
A complete agreement includes the parties with license numbers, the project and prime contract it ties to, a priced scope of work, the subcontract sum, payment terms and retainage (commonly 5% to 10%), insurance limits with additional insured status, indemnification, lien waiver requirements, a schedule, and termination, warranty, and dispute resolution clauses.
How do contractors handle retainage and lien waivers with subs?
Most GCs hold 5% to 10% retainage from each payment and release it after final completion and acceptance. With every payment, collect a signed lien waiver from the sub so its suppliers and labor cannot put a lien on the project. Pair this agreement with a lien waiver template to keep your title clean.
What insurance should I require from a subcontractor?
At a minimum, require Commercial General Liability of $1M per occurrence (or more on larger jobs), Workers' Compensation at statutory limits, and Auto Liability if the sub drives to the site. Always require the sub to name you as an additional insured and to hand you a certificate of insurance before mobilizing. One uninsured sub injury can land on your policy and your wallet.
Is this subcontractor agreement legally binding?
A signed agreement is binding, but subcontract laws, lien rights, and prompt-payment rules vary by state, and pay-when-paid clauses are not enforceable everywhere. This template gives you a solid, contractor-friendly starting point, but have a licensed attorney review it before you use it on real jobs. It is a tool, not legal advice.
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