The Pros and Cons of Subcontracting – A Tradesperson’s Guide

As a tradesperson, you can find full-time employment as a contractor or subcontractor. But, if you’re thinking about subcontracting, there are some benefits and downsides to consider. We’ve laid out the pros and cons of subcontracting so you can decide on the right path for you.

Ready to start, but not sure what to charge? Our free Rate Calculator can help!

1: What employment suits you the best?

Everybody’s financial and personal circumstances are different. So, it’s about choosing an employment option that fits you and your lifestyle. Our trade employment guides will help you understand what working as a subcontractor, contractor or employee involves – and which employment path might be best for you:

• Subcontractor versus employee – what’s the difference?
• The difference between contractors and subcontractors
• The difference between being self-employed and being a contractor 

2: The five advantages of subcontracting 

Working as a subcontractor has lots of great benefits, including

More flexibility
Subcontracting means you can choose what jobs you want to accept and when. You’ll have more autonomy over your schedule, who you work for and where. 

Specialise in your craft:
In full-time employment, you might have to do jobs you’d rather not do. As a subcontractor, you call the shots and can choose projects and jobs you genuinely care about and that align with your passions and strengths. 

Broaden your reach 
A subcontractor’s work isn’t limited to someone else’s geographical boundaries. Instead, you can market your services to a wider audience and ultimately grow your business.

Boost your profit margins 
Your work may be ad-hoc and sporadic, but you can likely demand a higher rate for your services, which could mean working less but earning more over time. 

Grow your expertise 
Progress happens when you’re out of your comfort zone. If you’re taking on a challenge, you’re more likely to grow your skillset and climb the ladder to being the best tradesperson you can be. 

3: The five disadvantages of subcontracting 

As with anything, there are some downsides to subcontracting you’ll need to consider:

Less stability 
Some weeks, you might have too much work, and others, you might not have enough. Not knowing when or how much your next pay will be means you’ll need to be extra vigilant with your finances.

Filing your taxes
You’ll oversee your taxes as a subcontractor. That can add a lot of stress and hours of filing paperwork after a long day on the tools, so you may need to hire an accountant.

Working for someone else
Subcontractors deal with contractors and other people involved in a project, so even if the contractor is happy with a job, there may be others who aren’t. You could spend a lot of your time and patience dealing with conflict or confusion.  

No employee benefits
You’re on your own as a subcontractor, so you won’t get any benefits employers offer, like sick and holiday pay, insurance, training opportunities or health benefits. You’ll need to factor these costs into your pay. 

Lack of work culture
Working as a subcontractor can mean transient workplaces. You may be in and out of jobs without building connections with the people you work alongside, which could feel isolating. To combat that, you’ll need to make more of an effort to connect with workmates.

4: To subcontract or not? That’s for you to decide. 

Working as a subcontractor is a great option for a lot of tradespeople. You get more flexibility in your schedule, potentially more income, and the opportunity to focus on a niche trade area. But there are some drawbacks. Whatever route you choose, job management software like Tradify will help you concentrate on the job (not your admin), whether you’re subcontracting, contracting, or starting your own trade business. 

Want to experience the benefits of an organised business? Sign up for a 14-day free trial with Tradify. No credit card required. No commitment. Or visit one of our live demo webinars to see Tradify in action.