# Cleaning subcontractor agreement: when to subcontract, IRS tests and the clauses to use

> A cleaning subcontractor agreement is a contract between your company and another cleaning business that does some of your work under your client contract. It only works when the sub really is a separate business under the IRS control test: their own insurance, pricing, supplies and other clients. The agreement sets scope, standards, insurance, payment, confidentiality, non-solicitation of your clients and how either side ends it. Clause-by-clause wording is below; it is not legal advice.

Published 2026-10-29, updated 2026-10-30 by Broombook · Hiring and your team · 16 min read  
Canonical page: https://broombook.com/guides/cleaning-subcontractor-agreement

## Key takeaways

- Subcontract for specialty work (carpet, windows, floor stripping), overflow and buildings you cannot staff; do not subcontract to avoid payroll on people who work like employees.
- The IRS looks at behavioral control, financial control and the relationship. A sub with their own insurance, pricing, supplies and clients passes; your former cleaner “on a 1099” does not.
- Collect a W-9 before the first payment and keep it four years; file a 1099-NEC when payments reach the threshold ($2,000 for payments made after December 31, 2025).
- Require a certificate of insurance for general liability, workers’ compensation where it applies, and auto, naming your company as additional insured, before the first job.
- Typical splits give the sub 60% to 75% of what the client pays, depending on who supplies equipment and who holds the client relationship (hypothetical range; price your own).
- Check your client contract first: many commercial contracts forbid subcontracting without written consent.

## When does subcontracting cleaning work make sense?

Subcontracting cleaning work makes sense when you need a skill or capacity you do not have, for a defined piece of work, from a business that would exist without you: a carpet cleaner for your office clients’ quarterly extraction, a window company for a three-story building, a local crew in a town 40 miles away, or a second company to cover a contract you won but cannot staff by the start date.

### Good reasons to subcontract

- **Specialty services.** Carpet and upholstery, hard floor stripping and waxing, pressure washing, high windows, post-construction. Your client gets one invoice; the specialist gets steady work.
- **Geography.** A property manager with buildings in two cities. A sub in the second city beats a two-hour drive.
- **Overflow and start dates.** A new commercial contract starting in ten days, or a move-out season you cannot cover with your team.
- **Being the sub yourself.** Larger janitorial firms, facility managers and national accounts subcontract local buildings to small companies. Cleaning sub contracts of this kind are a way into commercial work; see [how to get commercial cleaning contracts](https://broombook.com/guides/commercial-cleaning-contracts).

### Bad reasons

- Avoiding payroll taxes and workers’ comp for people who work your schedule, with your supplies, on your checklist. That is an employee with the wrong tax form, and the guide to [cleaning business W2 or 1099](https://broombook.com/guides/independent-contractor-vs-employee-cleaners) explains what it costs when an agency agrees.
- Handing your best residential clients to another company because you are too busy. Clients notice, and the sub now knows them.
- A client contract that says “no subcontracting without written consent.” Read the prime contract before you sign anything with a sub.

The rest of this guide assumes a real business-to-business arrangement. If what you actually need is more hands on your own schedule, hire; the guide to [hiring cleaners](https://broombook.com/guides/how-to-hire-cleaners) covers that route.

## Will the IRS treat your cleaning subcontractor as an employee?

The IRS will treat your subcontractor as an employee if you control how the work is done, control the business side of it, and the relationship looks permanent and central to your business, regardless of what the agreement is called. A subcontractor agreement helps only when the facts on the ground match it.

The IRS page on [independent contractor or employee](https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee) groups the evidence into three categories: **behavioral** (does the company control or have the right to control what the worker does and how), **financial** (how the worker is paid, whether expenses are reimbursed, who provides tools and supplies), and **type of relationship** (written contracts, employee-type benefits, whether the relationship continues indefinitely and whether the work is a key aspect of the business). The IRS says businesses must weigh all the factors; no single one decides.

### What a real cleaning subcontractor looks like

| Factor | Looks like a subcontractor | Looks like an employee |
| --- | --- | --- |
| Business identity | Registered business, own insurance, own invoices | An individual with no business name or policy |
| Other clients | Advertises and works for others | Works only for you, week after week |
| Pricing | Quotes a price per job or per building; can profit or lose | Paid by the hour at a rate you set |
| How the work is done | You define the result and standard; they decide method, staff and order of work | You set start times, pair them with your staff, train them on your method |
| Supplies and equipment | Their own | Yours |
| Helpers | They can send their own crew or a substitute | Must be them personally |
| Term | Per job or per contract, ends on its terms | Open-ended, like a job |

### The paperwork that goes with it

- **Form W-9 before the first payment.** The IRS says the first step once you decide someone is a contractor is to [have them complete Form W-9](https://www.irs.gov/businesses/small-businesses-self-employed/forms-and-associated-taxes-for-independent-contractors), and to keep it in your files for four years.
- **Form 1099-NEC.** You report nonemployee compensation on 1099-NEC when payments to a sub reach the reporting threshold. The [IRS FAQ](https://www.irs.gov/faqs/small-business-self-employed-other-business/form-1099-nec-independent-contractors/form-1099-nec-independent-contractors) gives the threshold as $600, rising to $2,000 for payments made after December 31, 2025.
- **Form SS-8 if you are unsure.** Either side can ask the IRS for a [determination of worker status](https://www.irs.gov/forms-pubs/about-form-ss-8). The IRS says it can take at least six months, and it asks the other party for their side and sends a copy of the decision to the worker, so most owners use it only in a genuine gray area.

State tests are often stricter than the IRS test. California’s ABC test, for example, makes it very hard for a cleaning company to subcontract cleaning to anyone who is not clearly a separate business; the [W-2 or 1099 guide](https://broombook.com/guides/independent-contractor-vs-employee-cleaners) covers it. None of this is tax or legal advice; a CPA who knows your state is worth the hour.

## What insurance should a cleaning subcontractor carry?

Require general liability, workers’ compensation (where state law requires it for their staff), and commercial auto if they drive to your clients, and get a certificate of insurance naming your company as additional insured before the first job. If your client contract requires a bond or background checks, flow those requirements down to the sub in writing.

### The certificate of insurance (COI)

- Ask for it from the sub’s insurer or broker, not a photo of a card. Check the policy dates and the limits against what your client contract requires of you.
- “Additional insured” means their liability policy also responds to claims against you arising from their work. Ask for it by name on the certificate.
- Put a renewal reminder in your calendar 30 days before the policy expires. An expired COI on the day of a claim is the same as no COI.

### Workers’ compensation

If your sub has employees, most states require them to carry workers’ comp. If they are a sole operator with no employees, some states let them go without it, and some let them buy a waiver or exemption. Why you care: in many states, if your uninsured sub’s worker is hurt on your client’s site, the claim can climb to the next insured business up the chain, which is you. Ask your own carrier how your policy treats subcontractors; the guide to [cleaning business insurance](https://broombook.com/guides/cleaning-business-insurance) explains the policies involved.

### Bonds and background checks

Commercial clients often require that everyone with a key is covered by a bond against employee theft and has passed a background check. A [janitorial bond](https://broombook.com/guides/janitorial-bond) normally covers your employees, not a sub’s, so either require the sub to carry their own bond or confirm with your surety whether the sub’s staff can be added. Put the background check requirement in the agreement and ask for written confirmation that it was done; you do not need, and usually should not hold, the reports themselves.

## How do you price cleaning sub contracts?

Price cleaning sub contracts from the client’s price down: the sub’s share has to cover their labor, supplies, insurance and a profit, and your share has to cover selling and managing the account, inspections, your insurance and your profit. In practice the sub ends up with something like 60% to 75% of the client price, more when they bring equipment and take the risk, less when you supply everything and hold the relationship. Those are hypothetical ranges to show the shape; your numbers come from your costs.

### A worked example (hypothetical numbers)

1. Your client pays $2,400 a month for a 12,000 sq ft office cleaned five nights a week.
2. The sub quotes $1,650 a month to do the work with their own crew and equipment, about 69% of the client price.
3. You keep $750 a month. Out of it: about two hours a month of inspections and client calls, your liability insurance share, invoicing, and a reserve for re-cleans.
4. If your loaded cost of managing the account is $250 a month, you net $500, or about 21% of the contract, for no night work and no payroll.

Compare that with staffing it yourself: five nights at three hours each is 65 hours a month. At a $20 wage plus about 12% for payroll taxes and workers’ comp (an assumption; see the [cost comparison](https://broombook.com/guides/independent-contractor-vs-employee-cleaners)), labor runs about $1,456 before supplies, equipment and supervision. Employees keep more margin on paper, but only if you can hire, schedule and inspect night staff reliably. The [commercial cleaning calculator](https://broombook.com/tools/commercial-cleaning-calculator) gives you a starting client price by square footage.

### How to structure the pay

- **Flat price per building per month** for recurring janitorial work. Simple to invoice, and it keeps the sub from being paid by the hour like an employee.
- **Flat price per job** for specialty work: per carpet job, per window count, per 1,000 sq ft stripped and waxed.
- **Let the sub quote.** A sub who sets their own price, and can make more by working efficiently, is one more fact on the contractor side of the IRS test.
- **Payment terms.** Net 15 after an approved inspection or client sign-off is a starting point we suggest. Pay subs on time; nothing ends a good sub relationship faster than waiting on you while they pay their own crew.
- **Re-cleans.** Say who pays when the client rejects a job: usually the sub re-does it at no charge within 24 hours, and repeated failures end the agreement.

## Cleaning subcontractor contract: the clauses, with wording to copy

A cleaning subcontractor contract needs fourteen clauses. The wording below is a starting point you can copy and edit; replace the bracketed parts, delete what does not apply and have a lawyer in your state review it before you use it. This is a template and general information, not legal advice.

### 1. Parties and relationship

> This Subcontractor Agreement (“Agreement”) is between \[Your Company LLC\], \[address\] (“Contractor”), and \[Sub Company LLC\], \[address\], \[state business ID\] (“Subcontractor”), effective \[date\]. Subcontractor is an independent business engaged to provide the services described in Exhibit A to Contractor’s clients. Nothing in this Agreement creates an employment, partnership, joint venture or agency relationship. Subcontractor is free to provide services to others.

### 2. Scope of work (Exhibit A)

> Subcontractor will perform the cleaning services listed in Exhibit A at the locations listed there, to the standards in Exhibit B (the location checklist and specifications). Work outside Exhibit A requires a written change order signed by both parties, stating the added scope and price.

### 3. Schedule and access

> Services will be completed within the service windows in Exhibit A (for example, after 6 pm and before 5 am on scheduled nights). Within those windows, Subcontractor determines the order, method and staffing of the work. Keys, fobs and alarm codes issued to Subcontractor are Contractor’s and the client’s property, will be logged by tag number, will not be copied or shared, and will be returned within 24 hours of a request or of termination.

### 4. Standards, inspection and re-cleans

> Work will meet the standards in Exhibit B. Contractor or the client may inspect at any time. Deficiencies reported in writing will be corrected by Subcontractor at no charge within \[24\] hours. Three deficiency notices for the same location within \[60\] days are grounds for termination under section 12.

### 5. Personnel, background checks and conduct

> Subcontractor is solely responsible for hiring, training, supervising, paying and insuring its own personnel, and for all payroll taxes and workers’ compensation obligations for them. Subcontractor will ensure that each person it assigns to a client location has passed a criminal background check consistent with applicable law \[and any client requirement in Exhibit A\], and will confirm this in writing on request. Subcontractor’s personnel will follow the client’s site rules and will not remove, use or photograph client property.

### 6. Supplies and equipment

> Subcontractor provides all labor, supplies, chemicals and equipment needed to perform the services, \[except: list any client-supplied consumables such as paper products or trash liners\], and is responsible for compliance with OSHA hazard communication requirements for its personnel, including safety data sheets for products it brings on site.

### 7. Insurance

> Before starting work and throughout the term, Subcontractor will maintain: (a) commercial general liability insurance of at least $\[1,000,000\] per occurrence and $\[2,000,000\] aggregate; (b) workers’ compensation insurance as required by the law of the state where services are performed, or a valid exemption; (c) commercial auto liability of at least $\[1,000,000\] if vehicles are used in performing the services; and (d) \[a fidelity or janitorial bond of at least $\[amount\] covering its personnel\]. Subcontractor will provide certificates of insurance naming Contractor \[and the client\] as additional insured on the general liability policy, and will notify Contractor within \[10\] days of any cancellation or material change.

### 8. Compensation and payment

> Contractor will pay Subcontractor the amounts in Exhibit A (\[flat monthly price per location / price per job\]). Subcontractor will invoice \[monthly / on completion\]; Contractor will pay within \[15\] days of receipt of an invoice for work accepted under section 4. No other compensation, benefits, reimbursement or overtime is payable. Subcontractor is responsible for its own taxes and will provide a completed Form W-9 before the first payment.

### 9. Confidentiality

> Client names, addresses, access codes, schedules, pricing and anything observed inside client locations are Contractor’s confidential information. Subcontractor will use it only to perform this Agreement, will limit it to personnel who need it, and will not disclose it during or after the term.

### 10. Non-solicitation of clients and personnel

> During the term and for \[12\] months after it ends, Subcontractor will not, directly or indirectly, solicit or provide cleaning services to any client location it served under this Agreement, except through Contractor, and neither party will solicit the other’s employees. If Subcontractor breaches this section, Subcontractor will pay Contractor \[an amount equal to six months of the fees Contractor last billed that client\] as a reasonable estimate of Contractor’s loss. \[Enforceability of this section varies by state; have it reviewed.\]

### 11. Indemnification

> Each party will defend and indemnify the other against third-party claims, damages and reasonable costs to the extent caused by its own negligence, willful misconduct, or breach of this Agreement, including claims arising from its own personnel. Subcontractor’s obligations include claims for loss or damage to client property caused by its personnel.

### 12. Term and termination

> This Agreement starts on the effective date and continues \[month to month / until the end of the client contract on \[date\]\]. Either party may end it on \[30\] days’ written notice. Contractor may end it immediately on written notice for theft, unauthorized entry, sharing of access codes, lapse of required insurance, or the third deficiency notice under section 4. On termination, Subcontractor will return all keys, codes, client documents and property within 24 hours, and Contractor will pay for accepted work performed through the termination date.

### 13. Disputes and governing law

> This Agreement is governed by the laws of \[state\]. The parties will first try to resolve any dispute by a meeting between their owners within \[10\] days of written notice. Unresolved disputes will be brought in the courts of \[county, state\] \[or resolved by binding arbitration under \[rules\]\]. The prevailing party may recover reasonable attorney fees.

### 14. General and signatures

> This Agreement with its Exhibits is the entire agreement and replaces prior discussions. Changes must be in writing and signed by both parties. Subcontractor may not assign this Agreement or further subcontract the services without Contractor’s written consent. If any provision is unenforceable, the rest remains in effect. Signed: \[name, title, company, date\] for Contractor; \[name, title, company, date\] for Subcontractor.

Attach Exhibit A (locations, services, service windows, prices, client-specific requirements) and Exhibit B (the checklist and specifications for each location). The free [cleaning contract template](https://broombook.com/tools/cleaning-contract-template) is written for the client side of the relationship; use it for the prime contract and keep the two consistent on scope, standards and insurance.

## How do you manage cleaning subcontractors day to day?

Manage subcontractors by result, not by supervision: a written checklist per location, scheduled inspections, one channel for client communication (you), and payment tied to accepted work. The more you direct the sub’s crew hour by hour, the more they look like your employees and the less the agreement protects you.

- **One checklist per location.** The [office cleaning checklist](https://broombook.com/guides/office-cleaning-checklist) is a starting point; attach the final version as Exhibit B so “clean” means the same thing to the client, to you and to the sub.
- **Inspect on a schedule.** Weekly for the first month at a new location, then every two weeks or monthly. Score the same items each time and send the sheet to the sub the same day.
- **Keep the client relationship.** The client calls you, you call the sub. Reminders, confirmations and invoices go out under your brand. In Broombook (booking, scheduling and reminders for recurring service businesses) the client’s recurring visits, reminders and invoices stay under your company name while you note in the visit which crew covers it; the sub runs its own staff schedule in its own system, which is the right separation.
- **Track keys and COIs.** A key log by tag number and a calendar reminder 30 days before each sub’s insurance expires.
- **Pay on time, every time.** Late payment is how you lose a good sub to a competitor who pays net 15.
- **Review quarterly.** Deficiency count, client complaints, invoice accuracy, insurance status. Renew, renegotiate or end.

## Which mistakes cost the most with cleaning subcontractors?

The expensive mistakes are the same four every time: treating a sub like staff, starting work before the certificate of insurance arrives, having no non-solicitation clause, and subcontracting a contract that forbids it.

| Mistake | What it leads to | Fix |
| --- | --- | --- |
| Paying the sub by the hour, setting their start times and training them on your method | Reclassification as an employee, with back taxes and penalties | Flat prices, service windows, your standard, their method |
| Letting a sub start before the COI arrives | A claim lands on your policy or on you personally | No COI, no keys |
| No non-solicitation clause | The sub quotes your client directly at 70% of your price | Section 10 above, reviewed for your state |
| Subcontracting a contract that forbids it | Breach of the prime contract; losing the account | Read the prime contract; get written consent |
| No W-9 on file at year end | Scrambling for tax IDs in January; possible backup withholding issues | W-9 before the first payment, kept four years |
| Verbal scope | “That was never part of the deal” on both sides | Exhibit A and B, signed |

Done properly, a subcontractor is a way to say yes to work you would otherwise turn down, with a margin for managing it and no night shifts on your own calendar. Done as a way to avoid payroll, it is the most expensive shortcut in the industry.

## Frequently asked questions

### What is a cleaning subcontractor agreement?

A contract between a cleaning company and a separate cleaning business that performs part of the first company’s client work. It sets the scope, standards, schedule windows, insurance, payment, confidentiality, non-solicitation of clients and how the arrangement ends, and it states that the sub is an independent business responsible for its own staff and taxes.

### Can I subcontract my cleaners instead of hiring them?

Not if they work like employees. The IRS weighs behavioral control, financial control and the type of relationship; a cleaner who works your schedule with your supplies and your checklist is an employee whatever the paperwork says. A subcontractor is a separate business with its own insurance, pricing, equipment and other clients.

### What insurance should I require from a cleaning subcontractor?

General liability (commonly $1 million per occurrence), workers’ compensation where state law requires it for their staff, commercial auto if they drive to your clients, and a bond if your client requires one. Get a certificate of insurance naming your company as additional insured before the first job, and track the expiry date.

### How much should a cleaning subcontractor get paid?

There is no standard split. Work from the client price down: the sub needs to cover labor, supplies, insurance and profit, and you need to cover selling, managing and inspecting the account. Many arrangements land somewhere around 60% to 75% of the client price for the sub, higher when they bring equipment and carry more risk. Let the sub quote a flat price per building or per job.

### Do I send a 1099 to a cleaning subcontractor?

Yes, Form 1099-NEC, once payments for the year reach the reporting threshold. The IRS lists the threshold as $600, rising to $2,000 for payments made after December 31, 2025. Collect a Form W-9 before the first payment and keep it for four years. Payments to a corporation are often exempt; check the current 1099 instructions.

### Can a subcontractor take my cleaning clients?

They can try, unless the agreement says otherwise and your state enforces it. Include a non-solicitation clause covering the locations they served for a set period after the agreement ends, keep the client relationship in your name, and have the clause reviewed, because enforceability of these restrictions varies widely by state.

## Sources

- [IRS: independent contractor (self-employed) or employee?](https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee)
- [IRS: forms and associated taxes for independent contractors (W-9, 1099-NEC)](https://www.irs.gov/businesses/small-businesses-self-employed/forms-and-associated-taxes-for-independent-contractors)
- [IRS: Form 1099-NEC and independent contractors FAQ](https://www.irs.gov/faqs/small-business-self-employed-other-business/form-1099-nec-independent-contractors/form-1099-nec-independent-contractors)
- [IRS: About Form SS-8, determination of worker status](https://www.irs.gov/forms-pubs/about-form-ss-8)

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