To start subcontracting as an HVAC tech, check what license your state or city requires to contract (not just to work), hold EPA 608 certification, set up your business and taxes, buy liability insurance, work out a rate that clears your break-even, and agree pay terms in writing with each company before the first job.
This is a setup checklist. Requirements for licensing, insurance and taxes depend on your state and situation. Check with your state licensing board, an insurance agent and a CPA before you rely on any of it.
1. Find out what your license lets you do
Many techs hold a license, or work in a state without one, and assume that covers contracting. It may not. In some states and cities, the rules for an employee working under a contractor's license differ from the rules for a business doing the work itself. Ask your state contractor or mechanical board:
- Can I do HVAC work as my own business, or only under a licensed contractor?
- If I'm subcontracting to a licensed contractor, whose license covers the permit?
- Do I need a business or contractor registration on top of my individual license?
Write down the answers and the date you checked.
2. Hold EPA 608, ideally Universal
Under EPA rules, technicians who service or dispose of equipment that could release refrigerant must be certified, and the EPA's refrigerant sales restriction (checked as of October 2026) means you generally need certification to buy refrigerant yourself. Companies that sub out work will ask for your card. See how to get EPA 608 certification.
3. Set up the business side
- Business structure and registration. A sole proprietorship is the simplest; some techs form an LLC. A CPA or attorney can tell you which fits.
- Taxes. As a contractor you pay self-employment tax and generally quarterly estimated tax. The 1099 vs W-2 comparison links the IRS pages.
- A separate bank account. It makes taxes and invoices far easier to track.
- Records. Mileage, receipts, invoices and payments from day one.
4. Get insured
Most companies that sub out HVAC work will ask for a certificate of insurance before they send a job. General liability is the usual minimum. Depending on your state and whether you hire help, you may also need commercial auto and workers' compensation. Your tools and equipment can be covered too. An insurance agent who works with contractors can tell you what's typical and what your clients will ask for. For the coverage types in more detail, see what insurance a contractor needs.
5. Build your kit and your truck
As an employee, the shop supplied the truck, the recovery machine and often the gauges. Now they're yours. Budget for the full kit before you quit a job. The list is in what tools an HVAC technician needs.
6. Set a rate that clears your break-even
Your rate has to pay for the truck, tools, insurance, taxes and the hours you can't bill. Use the break-even formula from the 1099 vs W-2 page:
R = (W × 1.0765 + E + B) ÷ H
Then decide how you'll charge each company: hourly, flat per job, or a share of the company's price. Each has a different risk.
| Pay structure | You carry the risk of | Works when |
|---|---|---|
| Hourly | Disputes over hours | Diagnostics, open-ended repairs |
| Flat per job | Jobs running long | Installs and maintenance you can time well |
| Percent of the company's price | The company's pricing and discounts | You trust their price book |
Track how long each job type actually takes you. If a flat-rate install runs two hours over, your hourly rate on that job just fell.
7. Agree terms before the first job
A handshake works until the first late payment. Before you take work, agree in writing on:
- the pay structure and amount for each job type
- when you're paid (for example, a set number of days after the job is done)
- who supplies equipment, parts and refrigerant, and who pays for them
- who handles callbacks and warranty work, and whether you're paid for them
- whose name the homeowner sees
- what insurance and credentials you must keep current
For a formal subcontractor agreement, have an attorney review it. This list is the set of questions, not the contract.
8. Fill your calendar
The usual sources are former employers, local HVAC companies that run short in peak season, supply houses and general contractors. The full approach is in how to find subcontract work in the trades.
One option built for this: CrewConnect, live in early access, lets HVAC companies send work into a contractor's open times. You share open times, not your job list or your customers, and every job arrives with pay terms both owners agreed to, a percent of your list price or a flat amount due a set number of days after the job. A Connect seat is free for 1099s who only receive CrewConnect work.
What to take away
- Confirm what license you need to contract, not just to work. Ask your state board.
- EPA 608 and a certificate of liability insurance are what companies ask for first.
- Set your rate from your break-even, not from what a W-2 job paid.
- Get pay structure, payment timing, parts and callbacks in writing before job one.
Common questions
Do I need my own license to subcontract HVAC work?
It depends on your state and city. Some let you work under the hiring contractor's license; others require you to hold your own license or registration to contract. Ask your state contractor or mechanical licensing board.
What insurance does an HVAC subcontractor need?
General liability is the most common requirement from companies that sub out work. Commercial auto and workers' compensation may also apply, depending on your state and whether you have employees. Ask an insurance agent who covers contractors.
How much should I charge as an HVAC subcontractor?
At least your break-even rate: what you'd need to match a W-2 job after the employer tax share, your costs, benefits and unbillable hours. The formula and an illustrative example are on the 1099 vs W-2 page.
Can I subcontract for more than one HVAC company?
Usually yes, and working for several companies spreads the risk of one company's slow month. Check that your agreements don't restrict it, and keep your calendar in one place so you never promise the same day twice.