Who must obtain Subcontractor's Statements before paying subcontractors (NSW)?

NSW principal contractors obtain a signed Subcontractor's Statement for each payment period to avoid liability for a subcontractor's unpaid workers compensation premiums, payroll tax and wages.

In New South Wales, a principal contractor can be made liable for a subcontractor's unpaid workers compensation premiums, payroll tax and employee remuneration for work done under the contract. Three laws create that exposure: section 175B of the Workers Compensation Act 1987, Schedule 2 Part 5 of the Payroll Tax Act 2007 and section 127 of the Industrial Relations Act 1996. The principal is relieved of it by obtaining a signed Subcontractor's Statement (Revenue NSW form OPT 011) declaring that, for the stated period, those premiums, remuneration and payroll tax have been paid, with the workers compensation certificate of currency attached. For payroll tax, Revenue NSW can recover a contractor's unpaid tax from the principal where it relates to the contract work, remains unpaid 60 days after the financial year ends, and no signed statement was obtained.

Applies only if you are a principal contractor engaging subcontractors. Whether it applies turns on a fact that no industry, structure or size settles on its own.

How the regulator frames it: Any business that contracts another person or entity to carry out work connected with its business undertaking, where the subcontractor's employees or workers perform the work. This includes building owners or occupiers who engage work in connection with their business, and subcontractors who in turn engage their own subcontractors.

What triggers it: Engaging a subcontractor who employs or engages workers to perform the contract work, and each payment claim made under that contract.

Jurisdiction: New South Wales law only. A business with no operations in NSW is outside it, whatever the rest of the test says.

Outcome across the 35 industries Rules Mate maps (1 of 35: only if a further fact applies; 34 of 35: no).

Structure does not change the answer in construction (residential & commercial): for every structure the answer is "only if a further fact applies".

Size does not change the answer in construction (residential & commercial): at every size band the answer is "only if a further fact applies".

Each line is one run of the Rules Mate applicability engine for a single business profile, with the reason the engine gives:

• Pty Ltd company in real estate agents with 6–19 employees, turnover $1M–$3M: does not apply. Requires a trigger outside this questionnaire.
• Pty Ltd company in construction (residential & commercial) with 6–19 employees, turnover $1M–$3M: check whether it applies. applies only if you are a principal contractor engaging subcontractors.

The engine shows this obligation as "check whether this applies" when a business has industry: Construction (residential & commercial) and operations in NSW / QLD. It then applies only if you are a principal contractor engaging subcontractors. That fact is not something Rules Mate can infer from industry, structure or size.

When due

Obtain a statement for each payment claim period. Each statement must state the period it covers, and sequential statements should give continuous coverage of the contract.

Frequency

When a triggering event occurs

Evidence to keep

Signed Subcontractor's Statement for every period, showing the contract identifier and the date of the payment claim; attached certificate of currency for the subcontractor's workers compensation insurance; copies of statements obtained from sub-subcontractors; retention of statements for the periods set by each Act (currently up to seven years).

Status

Current

Priority

High

Maximum penalty: Without a valid statement the principal contractor may be liable for the subcontractor's unpaid workers compensation premiums, payroll tax and remuneration. A subcontractor, or a person signing on its behalf, who gives a statement knowing it to be false commits an offence under each of the three Acts.

Rules Mate has not yet classified the audit or assurance level for this obligation. Any audit, review or certification requirement is set by the regulator source listed below.

• Home Building Compensation Fund (NSW): NSW residential building work >$20,000 requires HBCF insurance.

Rules Mate tracks 9 published obligations tagged "construction", 5 of them rated critical. For a professional services Pty Ltd company with 6–19 employees operating in every state, 0 of those apply outright. This obligation is rated high priority, and is triggered by events.

Regulated by Revenue NSW.

Revenue NSW: NSW state taxes — payroll tax, land tax, stamp duty, fines.

• Revenue NSW

Free tools that help with this obligation:

• Compliance calendar builder