Pay When Paid
Pay when paid means you pay a subcontractor only after the client pays you for that work. Agree it before the job starts. Never let a helper assume it.
What it means
Normally a subcontractor expects payment on the date you agreed with them. The state of the client’s invoice does not matter. Pay when paid changes that. Their payment date follows the client’s payment, and it has no fixed date of its own.
It is fair to ask for this. Say it out loud before work starts, as an agreed term. Do not let a slow-paying client quietly pass the delay down to someone who never agreed to it. If a subcontractor agreed to a fixed pay date and then waits on your client, you owe them an explanation.
You agree with a subcontractor that you will pay them within seven days of the client settling your invoice. There is no fixed date. Both sides know this from the start, so a slow-paying client delays a known step.
Letting a subcontractor’s payment slip because the client has not paid, when you never agreed that with them. A helper who expected a fixed date will reasonably call that late payment.
General information, not legal or tax advice. Rates and rules vary by place; check yours. See our terms for the full version of this note.
See also
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