Definition
Subcontractor costs are payments to subs (electrical, plumbing, HVAC, framing, etc.) for work performed on a specific job. They are direct costs of that job and must be tracked by job for job costing, billing (e.g., pass-through on a schedule of values), and compliance (e.g., 1099, lien waivers).
Why It Matters
Sub costs often represent a large portion of project cost. Assigning them to the correct job is required for accurate job profit and for preparing pay applications and lien waivers. It also supports variance analysis (sub bid vs. actual) and ensures 1099 and W-9 tracking tie to the right project when needed.
Field Example
Job #500 (tenant build-out) has electrical sub invoice for $8,400 and plumbing sub for $3,200. Both are coded to Job #500. The job cost report shows $11,600 in subcontractor costs. The PM compares to the original sub quotes and approves payment; the system ties the payment to the job for WIP and profitability.
Calculation / Formula (if applicable)
Subcontractor cost for a job = Sum of all sub invoices (or committed amounts) assigned to that job. May include retention held; report gross vs. net as needed for billing and WIP.
Software Application
When entering a sub invoice or commitment, require job (and optionally cost code or SOV line). Link to vendor/payee for 1099 and W-9. Report sub cost by job and by vendor. Support retention and lien waivers tied to job and vendor.
Tooltip Version
Subcontractor costs are payments to subs for work on a specific job; they’re a direct cost of that job and must be assigned to it for accurate job costing.
Related Objects
Related: