What Is a Subcontractor Statement? [Examples + Step-by-Step Guide]

In construction, every detail matters, and subcontractor statements are one of those details you can’t afford to ignore. These documents confirm subcontractors have fulfilled their legal and financial obligations—wages paid, taxes cleared, and insurance sorted.

Without subcontractor statements, you’re left vulnerable to risks like unpaid suppliers, legal liabilities, and disruptions in construction cash flow. These documents provide clarity, accountability, and legal protection, making them essential for any project that involves subcontractors.

Subcontractor Statement Definition and Purpose

A subcontractor statement is a formal declaration submitted by a subcontractor to a contractor or project manager. It serves as proof that the subcontractor has met their obligations, which typically include:

• Paying employees: Ensuring workers have received their wages and benefits like superannuation.
• Settling supplier accounts: Confirming materials and services have been paid for.
• Meeting legal requirements: Verifying compliance with tax laws, insurance, and workplace safety standards.

Subcontractor statements are often required during key stages of a project, such as progress payments, audits, or final handovers, ensuring compliance with progress claims in construction.

Here’s why subcontractor statements are essential:

• Legal Protection: These statements confirm compliance with laws and regulations, shielding you from penalties and legal disputes.
• Financial Accountability: By confirming payments, they prevent disputes over unpaid wages or materials, ensuring smooth financial transactions.
• Risk Mitigation: Without a subcontractor statement, you could be held responsible for unpaid debts or safety violations, even if they aren’t your fault.

Imagine reaching the final stage of a project only to face delays because a subcontractor failed to pay suppliers. Subcontractor statements prevent these situations by ensuring all obligations are met, leaving no room for errors or liabilities.

Components of a Subcontractor Statement NSW

If you’re handling subcontractor statements NSW, each section is essential for confirming compliance and protecting your project. Missing even one part can lead to disputes, delays, or financial risks. Let’s dive into each component, why it matters, and how it looks in practice.

1. Subcontractor Identification

This section ensures there’s no ambiguity about who is submitting the statement. It must include:

• Subcontractor’s Name: Use the full legal name of the business or individual.
• Australian Business Number (ABN): A unique number for tax and business identification.
• Contact Details: Include a complete address, email, and phone number for follow-up.

Why it matters:

Without proper identification, you risk accepting a statement from the wrong party, which could complicate payments, audits, or legal proceedings. For example, if a dispute arises about unpaid wages, having clear identification allows you to trace the responsible subcontractor quickly.

Example:

A subcontractor statement from “XYZ Electrical Services” might include:

• Name: XYZ Electrical Services Pty Ltd
• ABN: 12 345 678 901
• Address: 15 Main Street, Sydney, NSW 2000
• Email: admin@xyzservices.com
• Phone: +61 2 1234 5678

2. Financial Details

This section confirms that the subcontractor has settled all financial obligations. It must include:

• Employee Wages: Proof that workers have been paid.
• Superannuation Contributions: Confirmation of required payments to employee superannuation funds.
• Supplier Payments: Evidence that all invoices for materials and services have been cleared.

Why it matters:

Unpaid workers or suppliers could file claims against your project, delaying completion or leading to legal action. For instance, if a subcontractor doesn’t pay their workers, you could face lawsuits or strikes that halt your work.

Example:

• Employee wages paid: $50,000 (confirmed by payroll summaries).
• Superannuation contributions: $5,000 paid to AustralianSuper.
• Supplier payments: $15,000 for materials (receipts attached).

3. Legal Compliance Details

This section confirms that the subcontractor is meeting legal obligations. It should include:

• Tax Compliance: Declaration that GST, payroll tax, and other taxes are paid.
• Insurance Coverage: Proof of valid policies, such as public liability and workers' compensation.
• Workplace Safety Compliance: Confirmation that health and safety regulations are followed.

Why it matters:

Non-compliance with legal requirements can result in fines, project shutdowns, or liability for damages. For example, if a subcontractor lacks workers’ compensation insurance, you might be responsible for injuries on-site.

Example:

• GST Paid: Confirmed via a tax clearance certificate.
• Insurance: $10 million public liability coverage with ABC Insurance (certificate attached).
• Workplace safety compliance: Declaration signed by the subcontractor, stating adherence to Safe Work Australia standards.

4. Supporting Documentation

Supporting documents like payslips, supplier receipts, and a progress certificate provide proof of compliance and payment obligations.

Claims in the statement need evidence. Require the following:

• Payslips or Payroll Records: Proof of wages paid to employees.
• Supplier Receipts: Evidence that materials and services have been paid for.
• Insurance Certificates: Current policies confirming coverage.
• Tax Clearance Certificates: Confirmation that the subcontractor has no outstanding tax liabilities.

Why it matters:

Without supporting documents, the claims in the statement are unverifiable, leaving room for disputes or errors. For instance, if a supplier claims they weren’t paid, having receipts attached to the statement resolves the issue quickly.

Example:

• Payslips for employees showing $2,000/week paid per worker.
• Receipts from “ABC Materials Co.” showing $15,000 paid for construction materials.
• Certificate of currency for public liability insurance dated 01/01/2025 to 31/12/2025.

5. Signatures and Dates

This section makes the statement legally binding. It must include:

• Signature: The subcontractor or an authorised representative must sign the document, certifying the accuracy of the information.
• Date: This confirms when the statement was submitted, ensuring it reflects the most current compliance status.

Why it matters:

Without a signature and date, the statement isn’t enforceable. If a dispute arises, an unsigned document offers no legal protection. For example, if a subcontractor later claims they didn’t submit a statement, a signed and dated version provides evidence.

Example:

• Signed by: John Doe, Managing Director of XYZ Electrical Services Pty Ltd.
• Dated: 01/01/2025.

How to Prepare a Subcontractor Statement

Preparing a subcontractor's statement doesn’t have to be complicated, but it does require a step-by-step approach. Each step ensures that the statement is complete, accurate, and compliant with all legal and contractual requirements. Let’s walk you through the process.

1. Gather Subcontractor and Project Information

First, you need the basics. Collect these details:

• Subcontractor’s Legal Name: This must match the name registered with tax and business authorities.
• Australian Business Number (ABN): Essential for tax identification and legal verification.
• Contact Details: Include an address, phone number, and email so they’re easy to reach.
• Project Details: List the project name, location, and any relevant contract numbers.

Why this matters: Getting the right details from the start ensures the statement is tied to the correct subcontractor and project. Missing or incorrect information could cause delays or disputes.

2. Verify All Payments Are Completed

Verify all financial obligations are met, including supplier payments, wages, superannuation contributions, and any amounts tied to a progress claim for the current stage of the project.

This is where you ensure the subcontractor has met all financial obligations. Check the following:

• Employee Wages: Look at payroll records or payslips to confirm all workers have been paid.
• Superannuation Contributions: Confirm that mandatory contributions to employee superannuation funds have been made on time.
• Supplier Payments: Verify that invoices for materials, equipment, and services have been settled in full.

Why this matters: Unpaid workers or suppliers can file claims that could disrupt the project or put you at legal risk. Confirming payments avoids these complications.

3. Check Compliance with Legal Requirements

This step ensures the subcontractor is following the law. Review these areas:

• Tax Compliance: Confirm that GST, payroll tax, and income taxes have been paid. Request a tax clearance certificate if necessary.
• Insurance Policies: Verify that their public liability and workers’ compensation policies are current and meet the project’s requirements.
• Workplace Safety: Make sure they comply with safety regulations, including proper use of equipment and risk management protocols.

Why this matters: Legal non-compliance can lead to fines, project shutdowns, or liability for you as the contractor. This step keeps everyone protected.

4. Collect Supporting Documents

Attach evidence to back up every claim in the statement, using tools like a payment claim template checklist to ensure no details are overlooked. Required documents include:

• Payroll Records: Proof of wages paid to employees.
• Supplier Receipts: Evidence that materials and services have been paid for.
• Insurance Certificates: Documentation showing active coverage for liability and risks.
• Tax Clearance Certificates: If required, provide proof of tax compliance.

Why this matters: Without supporting documents, the claims in the statement may not be trusted. This transparency builds confidence and avoids disputes.

5. Complete the Subcontractor Statement Form

Now, fill out the statement form with all the information you’ve gathered. This includes:

• Subcontractor details and project specifics.
• Payment confirmations for wages, superannuation, and suppliers.
• Compliance declarations for taxes, insurance, and workplace safety.

Why this matters: Any errors or omissions could lead to the statement being rejected, delaying project payments or approvals.

6. Review for Accuracy

Before signing, double-check the statement for consistency and completeness. Confirm:

• All sections are filled out correctly.
• Financial details match the attached documents.
• Compliance declarations reflect the subcontractor’s current status.

Why this matters: Mistakes can cause delays, questions, or even disputes. A thorough review saves time later.

7. Sign and Date the Statement

The subcontractor or an authorised representative must sign and date the document. This step certifies that the information is accurate and makes the statement legally binding.

Why this matters: An unsigned or undated statement isn’t valid. Without this, the statement won’t hold up in case of a dispute.

8. Submit the Statement and Documents

Finally, send the completed subcontractor statement and all supporting documents to the contractor or project manager. Use the method specified in the contract—email, online submission, or hard copy—and ensure it’s submitted on time.

Why this matters: Late submissions can delay payments or impact project schedules. Keeping a record of the submission ensures accountability.

Protect Your Projects with Subcontractor Statements

Subcontractor statements are your first line of defense against financial and legal headaches. They ensure every payment, compliance requirement, and obligation is clearly documented, leaving no room for surprises.

When handled correctly, these statements build trust, streamline your processes, and protect your project from unnecessary delays or risks, helping you achieve smooth and successful outcomes.