Do I Need a Written Contract With a Subcontractor in NZ?

The short answer is that no law in New Zealand says a subcontract must be in writing. A builder can engage a subbie on a phone call and a price, and plenty do. The longer answer is that almost every rule that matters to that relationship, from whether the subbie is legally a contractor at all to how payment disputes are resolved, assumes a written agreement exists and works badly without one.

The contractor test now wants a written agreement

Since 21 February 2026 the Employment Relations Act 2000 has a specified-contractor gateway test, introduced by the Employment Relations Amendment Act 2025. If an arrangement meets all of its limbs, the worker is a contractor and cannot later claim to have been an employee. The limbs are: a written agreement that says the person is an independent contractor; the person is not restricted from working for others; the person is not required to be available at set times or days or for a minimum period, or can subcontract the work; the business does not end the arrangement because the person declined extra work; and the person had a reasonable opportunity to get independent advice before signing.

The first limb is a written agreement. Without one, you cannot use the gateway at all, and the question of whether your subbie was really an employee goes back to the old all-the-circumstances test, with everything that implies about holiday pay, KiwiSaver and personal grievances.

Payment disputes run on documents

The Construction Contracts Act 2002 applies to construction work whether or not the contract is written. It gives the subcontractor the right to serve payment claims and gives you a fixed window to respond with a payment schedule; miss it and the claimed amount becomes payable. Adjudication under the Act is fast and document-driven. An adjudicator asked to decide what was agreed on a handshake will look for the quote, the emails, the texts and the invoices, and will have to reconstruct the deal from them. A one-page agreement that states the scope, the price, the payment terms and the variation process settles most of that before it starts.

If you hold retentions, the Retention Money Amendment Act 2023, in force since 5 October 2023, requires the money to be held on trust, in a separate account or by a complying instrument, with records and reporting to the subcontractor. The agreement is where the retention percentage and release terms are written down.

Safety duties overlap whatever the paperwork says

Under the Health and Safety at Work Act 2015, you and your subcontractor are both PCBUs with overlapping duties on the same site, and section 34 requires you to consult, cooperate and coordinate. The agreement is the natural place to state who runs the site safety plan, who inducts, and how incidents are reported.

What the agreement should say

The parties, the site and the job. The scope in plain language, with exclusions. The price and how it is calculated: fixed, measured or hourly. Payment terms that match the Construction Contracts Act: when claims can be served, when you will respond, when you will pay. The variation process: in writing, priced before the work. Programme and the consequences of delay. Retentions, if any, and the release terms. Insurance and licences held. Health and safety responsibilities. Defects and the rectification period. How the agreement ends and how disputes are resolved. Signatures, with a note that the contractor had the chance to take advice.

Two pages is enough. A good subbie will sign it; a subbie who refuses to sign anything is telling you something.

Why it shows up in reviews

Across 13,567 publicly posted reviews of NZ builders and outdoor and civil contractors, punctuality is praised in 38.3% of positive builder reviews and 40.3% for civil and outdoor work, and tidiness and clean-up in 15.9% and 21.0%. Quality scores 99.0 out of 100 for builders and 98.8 for civil. The client does not see your subcontractors as separate businesses. The subbie who turned up late, left the site a mess, or walked off over a payment dispute is your review.

A template

The subcontractor agreement in our resource library is a free PDF and Word template with the agreement, an employee-or-contractor checklist built on the 2026 gateway test, and the Act references dated 9 October 2026. Not legal advice; a starting point that already covers the ground a handshake does not.

You do not need a written contract with a subcontractor. You need one the first time something goes wrong, and by then it is too late to write it.

Sources and legal references

• Employment Relations Act 2000 (as amended by the Employment Relations Amendment Act 2025)
• Construction Contracts Act 2002 (including the Retention Money amendments, 2023)
• Health and Safety at Work Act 2015

Legislation and agency links checked on 9 October 2026. This is general information, not legal or tax advice.