# Labor Only Agreement (Contract) > A contract template where the contractor and client agreed to pay for labor fee only Also applicable to the General Contractor and its sub-cons. - URL: https://essential.construction/files/business-operations/legal/labor-only-agreement-contract/ - Publisher: Essential Construction (https://essential.construction/) - Last updated: 2026-11-03 - Price: $8.99 USD (also included with Essential Construction membership) - Categories: Administration, Legal - Division: 01 - General - File Type: Document - Language: English --- A contract template where the contractor and client agreed to pay for labor fee only Also applicable to the General Contractor and its sub-cons. This contract labor agreement is a template for jobs where the client pays the contractor for labor only. It sets out the arrangement between a client and a contractor, and it can also be used between a general contractor and its subcontractors when the GC supplies the materials and the sub supplies the workforce. ## What is a labor only contract? A labor only contract is an agreement where the contractor provides workers and workmanship, while the client or general contractor supplies the materials and often the main equipment. The contractor is paid a labor fee, which may be a lump sum, a unit rate or a daily or hourly rate. This type of agreement is common in residential and small commercial work, and between general contractors and trade crews, such as formwork, masonry or finishing crews. ## When to use it - The owner buys the materials and hires a contractor to install them - A general contractor supplies materials and engages a crew for a trade package - Pricing work by the labor fee only, by lump sum or by rate - Small projects where a full supply-and-install contract is not needed ## What's included A labor only agreement template as a Word document (.docx). It is set up for a contractor and client who agree to pay for the labor fee only, and it can also be used between a general contractor and its subcontractors. ## How to fill it out 1. Enter the names and addresses of both parties and the project location. 2. Describe the scope of labor clearly, including what is and is not included. 3. State who supplies materials, tools, equipment, scaffolding and temporary facilities. 4. Set the labor fee and how it is calculated, such as lump sum or rate. 5. Set the start date, completion date and working hours. 6. Fill in payment terms, retention if any, and how variations are priced and approved. 7. Cover safety, insurance and responsibility for the workers, then review and sign. ## Common mistakes to avoid - Leaving it unclear who supplies small tools, consumables and equipment - Not defining how material waste or shortages are handled - Skipping the insurance and safety responsibilities for the crew - Agreeing to extra work verbally without a written variation ## Related templates and guides - [Subcontractor Agreement Template](https://essential.construction/files/business-operations/legal/subcontractor-agreement-template/) - [Subcontractor Scope & Agreement](https://essential.construction/files/business-operations/legal/subcontractor-scope-agreement/) - [Hourly Labour Timecard Template](https://essential.construction/files/construction/administration/hourly-labour-timecard-template/) - [Common Types of Construction Contracts And Their Use](https://essential.construction/academy/tutorials/common-types-of-construction-contracts-and-their-use/) ## Frequently asked questions ### What is the difference between labor only and supply and install? In a labor only contract, the contractor provides workers and the client supplies the materials. In a supply and install contract, the contractor provides both materials and labor and takes responsibility for buying, delivering and installing them. Supply and install usually puts more risk on the contractor. ### Who supplies tools and equipment in a labor only contract? It depends on what the parties agree. Often the contractor brings hand tools and the client supplies materials and major equipment, but this varies. The agreement should list who provides tools, equipment, scaffolding, consumables and site facilities. ### How is a labor only contract priced? It can be priced as a lump sum for the defined scope, a unit rate such as per square foot or per item, or a daily or hourly rate. Lump sums suit a clear scope. Rates suit work where quantities are uncertain. ### Is a labor only agreement the same as an independent contractor agreement? They are related but not the same. A labor only agreement describes how the work is split between the parties. Whether the workers are treated as independent contractors or employees depends on local labor and tax rules, not just the contract wording. ### Are there legal rules on labor only contracting? Yes, in some countries. In the Philippines, for example, labor-only contracting has a specific legal meaning under labor rules and is not allowed. Rules on contracting and worker classification vary widely, so have the agreement reviewed for your location before use.