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What is 'Subcontracting'. Subcontracting is the practice of assigning part of the obligations and tasks under a contract to another party known as a subcontractor. Subcontracting is especially prevalent in areas where complex projects are the norm, such as construction and information technology.
Subcontractor is not an agent or employee of Contractor for any purpose. Contractor is not responsible for deducting, and shall not deduct, from payments to Subcontractor any amounts for withholding tax, FICA, insurance or other similar item relating to Subcontractor or Subcontractorâs employees.Subcontractor shall be solely responsible for deducting and paying such items.ubcontractor is not an agent or employee of Contractor for any purpose. Contractor is not responsible for deducting, and shall not deduct, from payments to Subcontractor any amounts for withholding tax, FICA, insurance or other similar item relating to Subcontractor or Subcontractorâs employees.