Subcontractors are specialty trade contractors hired by a general contractor or prime contractor to do part of a project, such as framing, electrical, drywall, concrete, roofing, or HVAC. They bill the GC rather than the property owner, usually against a signed subcontract and often on a progress basis tied to the schedule of values.
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Most subcontractors price by the job, using a lump sum bid built from labor, materials, equipment, overhead, and profit. Many trades also quote unit prices, such as per square foot for drywall finishing, per linear foot for fencing or trenching, or per square for roofing. Time-and-material rates apply to change orders, small repairs, and work with unclear scope. Larger projects are billed in progress payments, often monthly, based on percent complete, with the GC holding retainage (commonly 5 to 10 percent) until closeout. Materials are usually passed through with a markup of 10 to 25 percent, and extras need a written change order before the work is done.
| Service | Priced | Typical range |
|---|---|---|
| Journeyman labor (T&M change orders) | per hour | $55-110 |
| Foreman or lead labor | per hour | $70-130 |
| Drywall hang and finish | per sq ft | $2-4 |
| Interior or exterior painting | per sq ft | $1.50-4 |
| Concrete flatwork (slab, driveway) | per sq ft | $6-14 |
| Framing labor | per sq ft | $6-16 |
| Equipment rental (skid steer, lift) | per day | $250-600 |
| Mobilization or small-job minimum | flat fee | $250-1,000 |
Typical US ranges. Rates vary by region, experience, and job size.
| Description | Qty | Rate | Amount |
|---|---|---|---|
| Interior drywall hang and finish, Level 4, per schedule of values line 5 (Pay App #2, 60% complete of $24,000) | 1 progress billing | $14,400.00 | $14,400.00 |
| Change Order #1: add soffit framing and board in kitchen, per approved CO dated 3/12 | 1 lump sum | $1,850.00 | $1,850.00 |
| T&M: patch water-damaged ceiling, journeyman labor | 6 hours | $75.00 | $450.00 |
| T&M: materials (board, compound, fasteners) with 15% markup | 1 lot | $214.00 | $214.00 |
| Scissor lift rental, 2 days (CO #1) | 2 days | $275.00 | $550.00 |
| Total | $17,464.00 | ||
Notes: Pay App #2 for period ending 3/31, Subcontract #2024-117. Retainage of 10% will be withheld per contract. Net 30 from GC receipt of invoice. Lien waiver (conditional progress) and current certificate of insurance attached. Late balances accrue 1.5% per month.
GC accounting departments match invoices to the specific job and contract number, and missing numbers delay approval.
Progress billing is tracked by period, and it prevents double billing or missed periods.
The GC checks work completed against the contract amount, so show contract sum, billed to date, this period, and balance to finish.
Extras are rarely paid without a signed change order reference, so list each one separately from base contract work.
Showing the held amount keeps both sides' books aligned and sets up the final retainage release request.
Many GCs will not release payment without a lien waiver, and requirements for conditional versus unconditional forms vary by state.
The GC needs it for compliance and for year-end 1099 reporting, and some states require the license number on all billing documents.
Subcontractors are typically paid on the GC's terms, often net 30 after the GC receives the invoice, and sometimes pay-when-paid or pay-if-paid, meaning you are paid after the owner pays the GC. Check your subcontract and your state's prompt payment rules, which in many states set maximum payment windows and interest on late amounts. Deposits are uncommon on large jobs but mobilization payments or material deposits are reasonable on specialty or long-lead items. Retainage is commonly 5 to 10 percent and released at substantial completion or final closeout. Payment arrives mostly by check or ACH, and many GCs pay on a set weekly or monthly check run with a submission cutoff.
Many GCs run payments once or twice a month and a late submission can push your money back a full cycle. Find out the cutoff and send the pay app a day or two early.
Verbal approval from a superintendent is hard to collect on. Get a written change order or at least an emailed approval with scope and price before starting, then reference it on the invoice.
Retainage balances are easy to forget and can add up to thousands of dollars. Calendar the release trigger in your contract and send a final invoice with a release request as soon as you finish.
Many states require a preliminary notice within a set number of days of starting work and have strict deadlines to file a mechanics lien. Check your state's rules at the start of each job, not when you are unpaid.
If a payment dispute or backcharge comes up, dated photos, signed time tickets, and delivery slips back up your billing.
A pay application is a progress billing form that shows your contract amount, work completed to date, previous payments, retainage, and amount due now. Most commercial and many residential GCs require one, often on a standard format such as the AIA G702/G703, rather than a plain invoice.
Retainage is a percentage of each payment, commonly 5 to 10 percent, that the GC holds until the work is complete. It is usually released after substantial completion, final inspection, or project closeout, depending on your contract and state law.
Often yes, if your contract allows stored materials billing. You may need to show invoices from suppliers, proof of storage, and insurance coverage. If the contract is silent, ask the GC in writing before including it.
That depends on your contract. A pay-when-paid clause often only delays payment for a reasonable time, while pay-if-paid can put the risk on you, and courts treat these clauses differently by state. Review your contract and consider speaking with a construction attorney.
It depends on the state and the trade. In many states, construction services are not taxed but materials may be, and some jobs for exempt owners need a resale or exemption certificate. Check with your state's department of revenue or a local accountant.
Send a Subcontractor estimate for approval, then turn it into an invoice when the work is done.
Subcontractor estimate template