Back Charge

Back Charge is an amount of money charged against a subcontractor for work the general contractor had to perform due to the subcontractor’s failure to meet contractual obligations.

How Back Charges Work

When a sub doesn’t finish their scope, leaves a mess, or damages another trade’s work, the GC has to fix the problem. The cost of that fix gets deducted from the sub’s contract through a back charge. It’s essentially saying: “You didn’t do this, so we did it for you, and you’re paying for it.”

Common Back Charge Scenarios

• Cleanup: A framing crew leaves debris everywhere. The GC hires a cleanup crew and deducts the cost from the framer’s next draw.
• Damage repair: A plumber punctures a roof membrane during rough-in. The GC has the roofer patch it and back charges the plumber.
• Incomplete work: An electrician skips trim-out on several units. The GC brings in another electrician to finish and deducts the cost.
• Schedule delays: A sub misses their window, causing other trades to sit idle. The GC may back charge for the resulting costs.

Practical Example

On a multifamily project, the drywall sub leaves scrap and dust in every unit after finishing. The GC sends a written notice (required by most contracts), waits for the sub to respond, then hires a cleaning crew for $3,200. That amount is deducted from the drywall sub’s next pay application.

Documentation is everything with back charges. Photos, written notices, and cost records protect you if the sub disputes the deduction. Projul’s budgeting tools help you track these costs against each subcontractor so nothing falls through the cracks.

For more on managing subcontractor relationships, see our guide on steps to take when terminating a subcontractor.