Subcontracting Painting Work in NZ

Subcontracting makes sense in specific situations:

• Overflow work — You have more jobs than you can handle alone. Rather than turning work away, subcontract the simpler jobs and focus on higher-value work yourself.
• Specialist skills — You've won a job that requires spray painting, heritage work, or commercial expertise you don't have. Bring in a specialist subcontractor.
• Large projects — Big jobs need more hands. Subcontractors let you scale up for a project without long-term commitments.
• Testing before hiring — Use subcontractors to test whether you have enough consistent work to justify hiring an employee or taking on an apprentice.

Don't subcontract just to avoid employer obligations. IRD and Employment NZ actively investigate "sham contracting" arrangements.

Your mark-up on subcontractor work needs to cover:

• Management time — Quoting the job, managing the client, site visits, quality checks. Budget 10–15% of total job hours.
• Risk — You're responsible for the finished product. If the subcontractor's work isn't up to standard, you fix it at your cost.
• Profit — You won the work and provided the opportunity. A margin is justified.

Example: Your subcontractor charges $45/hr labour-only. You quote the client at $60/hr (33% mark-up). On a 40-hour job, the subcontractor earns $1,800 and your gross margin is $600 — minus any management time and materials.

For help setting your client-facing rates, see our pricing strategy guide.

Getting the legal side wrong can be expensive. Key requirements in NZ:

• Genuine contractor relationship — The subcontractor must control how, when, and where they work. If you dictate hours, provide all tools, and they only work for you, IRD may classify them as an employee — and you'll owe PAYE, holiday pay, and KiwiSaver back-payments.
• Written agreement — Always have a written subcontractor agreement covering: scope of work, payment terms, insurance requirements, quality standards, and termination clauses — Master Painters NZ sets industry benchmarks here.
• Tax obligations — Subcontractors are responsible for their own tax. If they're not registered for GST, they needs to use the schedular tax system. Don't pay cash without records.
• Health and safety — Under the Health and Safety at Work Act 2015, you have obligations to ensure subcontractors are working safely on your sites. This includes site inductions, hazard identification, and appropriate PPE.
• Insurance — Require subcontractors to carry their own public liability insurance. Get a copy of their certificate before they start.

Your reputation is on the line when you subcontract work:

• Set clear expectations — Provide a detailed scope of works for every job. Don't assume the subcontractor knows your standards.
• Check work in progress — Visit the site at least once during the job, not just at completion. Catching issues early is cheaper than fixing them later.
• Use a completion checklist — Our job checklist works for subcontracted jobs too. Walk through it before signing off and paying.
• Build a reliable pool — Finding good subcontractors takes time. When you find reliable ones, treat them well — pay on time, give them consistent work, and communicate clearly.
• Payment terms — Standard is 7–14 days after invoice or on job completion. Withholding payment without cause damages relationships and may breach your agreement.