Pay terms are the agreement on how much a subcontractor is paid for a job and how many days after the job is done that payment is due. "Net 30" means the full amount is due 30 days after the trigger the agreement names, usually completion or the invoice date.
The two parts of a pay term
Every pay term answers two questions.
How much. Field service work is usually priced one of two ways:
- Percent. The sub gets a share of a price, for example 70% of the list price for that service.
- Flat. The sub gets a fixed amount per job, for example $180 per drain call.
When. The due date is a number of days after a trigger. Net 0 is due on completion. Net 15 and net 30 are common. The trigger matters as much as the number: "30 days after the job is done" and "30 days after you receive my invoice" can be weeks apart if the sub invoices late.
Percent vs flat, with numbers
The choice decides who carries the risk of a job's price moving.
Percent moves with the ticket. Flat is predictable and suits narrow-range work. Whatever you pick, write down which price the percent applies to. "65% of the job" is not a term. "65% of the partner's list price for this service" is.
What net 30 costs the sub
Net days are credit. The sub has done the work and paid their own fuel and helper, and you hold the money. A sub on net 30 who completes J jobs a week at average pay A always has roughly J × A × 30 ÷ 7 outstanding. At 12 jobs a week and $190 a job, that is about $9,800 the sub is carrying for you. Shorter terms make your work more attractive without raising the rate.
Why terms belong next to the schedule
Most pay disputes are about which terms applied to which job, not the rate. Terms attached to the job before it is sent remove the argument. In CrewConnect, work is sent into a partner's schedule with agreed pay terms: a percent of the partner's list price or a flat amount, due a set number of days (0 to 90) after the job is done, and both owners agree to the exact terms. Payouts are a ledger of what each side owes, with due dates; the companies settle the money directly.
For how this fits into sending work out, see subcontractor scheduling and the contractor network. For the tax status of the person doing the work, see 1099 subcontractor, and whether to use subs at all is covered in subcontract vs hire.
What to take away
- A pay term has two parts: the amount (percent or flat) and the due date (net days after a named trigger).
- Percent terms move with the ticket; flat terms are predictable. Name the price a percent applies to.
- Net days are credit the sub extends to you. Shorter terms are a reason good subs pick your work.
Common questions
Does net 30 mean 30 business days?
Usually not. Net terms are normally counted in calendar days, but the agreement decides, so write it down. Payment law for contractors varies by state, so check with a lawyer or your state's rules before relying on a term.
When does the net 30 clock start?
Whenever the agreement says. Common triggers are job completion, the sub's invoice date, or the date you receive the invoice. Completion is the cleanest for service work because it does not depend on paperwork timing.
Is percent or flat better for subcontractors?
Neither in general. Percent suits jobs where the ticket varies and the sub influences it. Flat suits standard, narrow-range work where both sides want a predictable number.