Subcontractor invoicing has specific rules around retention, CIS deductions, and variation claims. Here's what you need to include and when to send your invoice.
Subcontractor vs Main Contractor Invoicing
As a subcontractor, you invoice the main contractor (or builder) rather than the end client. This changes the dynamics: main contractors have tight payment schedules, often apply retention, and in some countries apply tax deductions at source.
Understanding these mechanics before you start work — not when the first invoice is disputed — protects your cash flow.
What to Include on a Subcontractor Invoice
Your details: Business name, address, ABN/tax number.
Main contractor's details: Their business name and contact.
Invoice number: Sequential.
Project details: Project name, site address, and the main contractor's project reference or purchase order number if they issued one.
Period or scope: "Works completed 1–31 May 2025" or "Electrical rough-in — Level 1 and Level 2 — as per subcontract agreement."
Value of work: Line items with quantities, rates, or lump sums.
Retention: If your subcontract includes retention, show it:
Previous claims: If you're billing progressively, show what you've claimed before:
CIS Deductions (UK)
In the UK, if you're registered under the Construction Industry Scheme (CIS), the main contractor deducts tax at source before paying you. The rate is:
This deduction comes off the labour portion of your invoice only — materials are not deducted.
Your invoice should show:
The main contractor should provide a CIS payment and deduction statement each time they pay, which you use to offset against your income tax at year-end.
Variations: Get Them in Writing First
Never do variation work without a signed variation order. The most common subcontractor payment dispute is a main contractor disputing extras that weren't formally approved.
When the main contractor asks for additional work:
If a main contractor verbally instructs extra work and then disputes the charge on your invoice, without a paper trail you have very limited recourse.
Retention Release Invoicing
When the project reaches practical completion, you're entitled to claim back the first half of retention. The second half is typically released after the defects liability period (usually 12 months).
Track your retention balance throughout the project. At practical completion, issue a retention release claim:
"Retention release — Practical completion certificate issued [date]
50% of total retention withheld ($1,800): $900 due"
Don't forget to claim it. Retention release invoices are easily overlooked, especially on projects that ended months ago.
Payment Periods for Subcontractors
In many countries, legislation prescribes maximum payment periods for construction subcontractors:
If a main contractor isn't paying within the statutory period, you have formal rights to serve a payment claim and, if unpaid, an adjudication process.
Know your rights before you're in a dispute — not after.
Using Quotation Expert for Subcontractor Billing
Quotation Expert's invoicing includes multi-line invoices with subtotals and deductions — useful for showing retention, previous claims, and net current claim clearly. Store each main contractor as a client and each project as a reference in the description, keeping your subcontract billing organised across multiple projects.
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