Subcontractors vs Employees in Commercial Cleaning Business: Which Is Better?

One of the biggest decisions you'll make as a commercial cleaning business is the workforce conundrum! Do you hire subcontractors or build your business around a team of employees?

It's like deciding between takeout (flexible, less responsibility) and hiring a chef (more control, but more responsibility).

Both can work beautifully—it depends on your business and goals.

Ready to become a workforce-planning pro? This guide covers everything you need to know (and we mean everything!) about both. Whether you want to keep things lean and flexible or grow your commercial cleaning business from the ground up, we've got you covered.

By the end of this article, you'll have a clear, step-by-step plan for structuring your workforce to fit your business perfectly. And we'll show you exactly how Aspire's house cleaning software makes both options easy to manage—regardless of whether you hire employees or subcontractors.

What is the difference between subcontractors and employees?

Hiring the right workforce for a cleaning business impacts costs, efficiency, and compliance. Business owners must understand the differences between subcontractors and employees to avoid misclassification and financial risks, including potential liability for unpaid employment taxes.

The Internal Revenue Service (IRS) defines these roles differently, which impacts taxes, liability insurance, payroll, and worker classification. 

→ Employers must pay unemployment tax on wages for employees. 

→ No such tax obligation exists for payments made to independent contractors.

→ Misclassification could result in back taxes and penalties.

Both subcontractors and W-2 employees perform cleaning services, but their relationship with the business is different. One offers flexibility, and the other provides control and consistency.

Understanding these differences helps cleaning business owners determine the best structure for their business needs and work schedule.

Differences include:

1. Worker Classification

• Subcontractors (1099 workers) are independent contractors responsible for their own taxes and expenses.

• Employees (W-2 workers) are part of the company and receive paychecks with payroll taxes deducted.

2. Taxes and Compliance

• Employers do not withhold income tax, Social Security, or Medicare taxes for subcontractors.

• Employers must withhold taxes and contribute to workers’ compensation insurance for employees, including Social Security taxes.

3. Control Over Work

• Subcontractors dictate how they complete cleaning jobs and use their own supplies and equipment.

• Employees follow company policies, use company-provided cleaning supplies, and work under direct supervision.

4. Cost

• Hiring subcontractors can be cost-effective in the short term, but may involve higher hourly rates.

• Employees require benefits, payroll taxes, and workers' compensation insurance, which increase long-term costs.

5. Scheduling & Availability

• Subcontractors work on a short-term or as-needed basis and offer flexibility but less dependability.

• Employees commit to a set work schedule, ensuring consistency for recurring cleaning clients.

6. Legal Risks & Misclassification

• Misclassifying employees as subcontractors can trigger IRS audits and liability for back taxes.

• Classifying workers ensures compliance with minimum wage, liability insurance, and business regulations.

Now that we know the differences, let’s explore the pros and cons of hiring subcontractors for a cleaning business.

What are the benefits of hiring subcontractors?

Hiring subcontractors offers flexibility, cost savings, and reduced administrative work for a cleaning business. Many business owners choose this model to scale without long-term commitments.

Employer costs are reduced since subcontractors are independent contractors and handle their own: 

• Taxes

• Cleaning supplies

• Insurance

Because subcontractors operate independently, cleaning companies can adjust their work schedules based on demand, avoiding excessive payroll costs.

With proper contracts, subcontractors provide high-quality cleaning services without needing employee benefits or payroll taxes.

Many cleaning businesses subcontract when expanding to new markets or taking on large cleaning jobs. Analyzing industry trends can help identify successful products, fill gaps in the market, and guide entrepreneurs in developing their business ideas.

For small businesses, subcontracting means access to skilled cleaners without the cost of a full-time employee.

Here are the reasons why many service businesses prefer independent contractors over W-2 employees.

Benefits of hiring subcontractors

1. Lower Costs

• No payroll taxes, Medicare taxes, or Social Security contributions.

• There is no obligation to provide workers' comp or employee benefits.

2. Flexibility & Growth

• Subcontractors work as needed so that you can grow without long-term commitments.

• Contracted cleaners are best suited for short-term contracts or seasonal spikes in cleaning jobs.

3. Less Admin

• There is no need to manage paychecks, tax withholdings, or benefits packages. Contractors invoice businesses and handle their own self-employment taxes.

• Less time spent on worker classification compliance.

4. No Training or Equipment Costs

• Depending on the contract, subcontractors will bring their own supplies, so you save on overhead for your cleaning business.

• Most independent contractors are already trained, so training is unnecessary.

5. Specialised Skills

• Many subcontractors specialize in deep cleaning, floor care, or disinfection services.

• Hiring experts for specific cleaning services means no full-time commitment.

6. Less Liability

• Subcontractors are independent businesses, so there is less risk of worker classification lawsuits.

• Employers avoid misclassification penalties with written contracts.

7. Faster Hiring & Onboarding

• No long hiring process or onboarding paperwork—subcontractors start working immediately.

• Good for urgent contracts or rapid growth.

While subcontractors offer flexibility and cost savings, there are trade-offs to consider before using this workforce model.

What are the drawbacks of hiring subcontractors?

While subcontractors offer cost savings and flexibility, they also come with challenges that impact a cleaning business.

Since subcontractors are independent, you have less control over their schedule, supplies, and services.

A cleaning company relying on independent contractors may struggle with consistency and quality control, especially if subcontractors work with multiple clients.

The IRS has strict worker classification rules. Misclassifying W-2 employees as subcontractors can result in:

• Back taxes and/or additional taxes 

• Penalties

• Legal disputes 

Without contracts, subcontractors may take cleaning clients or quit on short notice.

Insurance is also an issue. If a subcontractor doesn’t have liability insurance, the cleaning business is liable for damages or injuries.

→ Many business owners prefer to hire employees who commit to the business and its service standards for long-term stability. 

Local businesses should consider these factors when building their online presence.

Here are the challenges that make some cleaning businesses not use subcontractors as their primary workforce.

Drawbacks of hiring subcontractors

1. Lack of Control

• Subcontractors decide how they do cleaning jobs, so enforcing company standards is more burdensome.

• They don’t have to follow a schedule or wear branded uniforms like employees.

2. Inconsistent Quality & Availability

• Subcontractors work for multiple cleaning companies, so there can be scheduling conflicts.

• Quality may vary because they’re not fully invested in one cleaning business, and the business has no control over staff training.

3. Higher Hourly Rate

• While subcontractors eliminate payroll taxes, they may charge higher rates to cover their own taxes, cleaning supplies, and insurance.

• Over time, paying subcontractors per job can be more expensive than hiring a full-time employee.

4. Compliance & Legal Risks

• The IRS enforces strict worker classification laws. Misclassifying a subcontractor can lead to IRS audits and back taxes.

• A cleaning company must ensure subcontractors operate as truly independent contractors under IRS guidelines.

5. Risk of Losing Clients

• A subcontractor can take cleaning clients and work for competitors without a non-compete agreement.

• Client churn to subcontractors can harm the business and stunt growth over time.

6. Insurance & Liability

• The business is liable for damages or accidents if a subcontractor doesn’t have liability insurance.

• Workers’ comp insurance doesn’t cover independent contractors, so there’s additional risk.

7. Limited Long-Term Investment

• Subcontractors don’t get employee benefits or incentives to stay long-term. 

• A business with subcontractors may experience high turnover and instability.

While subcontractors offer flexibility, hiring employees can give more control and stability to a commercial cleaning business.

What are the advantages of hiring employees?

Hiring employees gives a commercial cleaning business more control, consistency, and long-term stability. Unlike subcontractors, W-2 employees work under company guidelines, ensuring quality control and reliability.

✓ Employees follow a set schedule so that a cleaning company can provide reliable cleaning services without last-minute cancellations.

✓ Employees develop skills that improve service quality through ongoing training and active management, creating stronger customer relationships.

✓ Employers get brand consistency. Employees wear company uniforms, use approved cleaning supplies, and follow standard procedures.

Long-term staff help a cleaning business scale efficiently. Instead of constantly hiring and retraining subcontractors, employees grow with the business. Business owners can promote from within the organization, so managers know operations from the ground up, providing expertise and insight that only first-hand knowledge can provide. 

Although hiring employees involves payroll taxes, Medicare taxes, and workers’ comp insurance, the investment can lead to higher retention and customer satisfaction.

For business owners who value stability and compliance, handling withholding and tax payments on employee wages can be more cost-effective in the long run.

Here’s why many cleaning business owners choose employees over subcontractors.

Advantages of hiring employees

1. More Control Over Work

• Employers dictate how, when, and where cleaning jobs are done.

• Employees follow company policies, so the business provides consistent service quality.

2. Reliable Scheduling & Availability

• Employees work on a fixed schedule, with no last-minute cancellations.

• A cleaning company can commit to regular cleaning jobs with confidence.

3. Stronger Customer Relationships

• Long-term employees build trust with cleaning clients through consistent service.

• Customer retention improves when clients see familiar, trained staff.

4. Brand Consistency

• Employees wear company uniforms for a cohesive brand image and professionalism on client properties.

• All staff use approved cleaning supplies and follow the same cleaning procedures.

5. Lower Long Term Cost

• While payroll and employee benefits increase upfront costs, employees may be more cost-effective than high-priced subcontractors in the long run.

• Employees reduce turnover costs by staying with the company.

6. Compliance & Legal Protection

• W-2 employees eliminate IRS misclassification risks so that the company won’t be at risk of back taxes and penalties.

• Employers have more control over workers’ comp insurance and liability coverage.

7. Better Team Collaboration

• Employees work as a team, creating a more efficient and better workplace culture.

• A strong team means higher job satisfaction and reduced turnover.

While employees offer stability and control, they also come with challenges that cleaning business owners must consider.

What are the challenges of hiring employees?

While hiring employees provides stability and control, it also comes with financial and administrative responsibilities. Effective marketing strategies can mitigate these challenges by bringing in a steady stream of clients, so employees have consistent work.

A cleaning business must manage:

• Payroll taxes

• Workers’ compensation insurance

• Employee benefits

• Other operational costs

Unlike subcontractors, employees need training, supervision, and ongoing management to maintain performance.

Government regulations, such as minimum wage laws and overtime rules, add to the challenges for business owners.

A cleaning company faces higher risk during slow seasons since employees must be paid regardless of workload.

Despite these challenges, many cleaning business owners invest in employees to build a long-term, reliable workforce. Plus, employers must pay employment taxes for their employees, not independent contractors who handle their own taxes.

Challenges of hiring employees and employment taxes

1. Higher Payroll & Tax Costs

• Employers pay Social Security, Medicare, and unemployment taxes for each employee.

• Workers’ comp insurance is mandatory, so there are more business expenses.

2. More Administrative Work

• Processing paychecks, payroll taxes, and employee benefits takes time and resources.

• Businesses must comply with IRS regulations and worker classification laws.

3. Training & Supervision Requirements

• Employees need onboarding and continuous training to maintain service quality.

• Ongoing performance management to ensure efficiency.

4. Compliance with Employment Laws

• Employers must follow minimum wage laws, overtime rules, and workplace regulations.

• Non-compliance can result in penalties and fines.

5. Fixed Labor Costs During Slow Periods

• Employees must be paid even when there’s no work.

• Unlike subcontractors, employees can’t be scheduled as needed.

6. Turnover Risk

• High turnover in the cleaning industry means more hiring and training costs.

• Retaining employees requires competitive pay and benefits.

Now that you know the pros and cons, business owners can decide what’s right for them.

How can you decide what’s right for your commercial cleaning business?

Choosing between subcontractors and employees depends on you as a business owner: your business, your budget, and your long-term goals.

Hiring subcontractors is the way to go if you need flexibility and lower admin costs.

If consistency, control, and long-term stability matter most, W-2 employees are the better option.

Consider work schedules, clients, liability insurance, and payroll taxes.

A commercial cleaning business must also consider IRS worker classification rules to avoid misclassification penalties.

Evaluating the pros and cons will help you structure your business for growth.

Things to consider when choosing between subcontractors and employees

1. Business Growth

• Need to scale fast without commitment? Hire subcontractors.

• Want a long-term team? Invest in employees.

2. Cost

• Want lower payroll costs? Subcontractors handle their own taxes and insurance.

• Willing to pay payroll taxes and employee benefits for more control? Employees are the way to go.

3. Work Schedule

• Need on-demand workers? Subcontractors can work as needed.

• Require consistent staffing for regular jobs? Employees are reliable.

4. Compliance

• Want to avoid IRS worker classification risks? Employees are safer.

• Comfortable with clear contracts and independent work terms? Subcontractors work without supervision.

5. Quality Control & Customer Satisfaction

• Need consistent service and brand representation? Employees follow company policies.

• Want access to specialized cleaning services without a full-time commitment? Subcontractors bring expertise.

6. Administrative Responsibilities

• Prefer less paperwork and HR management? Subcontractors reduce admin work.

• Willing to manage payroll, benefits, and compliance? Employees require more oversight.

Regardless of your choice, using the right cleaning business software can help manage the workforce, payroll, and scheduling for both subcontractors and employees.

How can Aspire help manage your workforce effectively?

Whether you hire subcontractors or employees, managing a cleaning workforce requires efficiency, accuracy, and flawless communication.

Aspire’s cleaning business software reduces administrative burdens associated with labor management by simplifying and integrating processes such as: 

• Scheduling

• Payroll

• Invoicing

• Performance tracking 

Automated tools allow cleaning business owners to focus on growth while keeping operations and workforce management smooth.

Simplified workforce scheduling

Aspire’s drag-and-drop scheduling feature makes it easy to build weekly schedules. The one-click route optimization reduces windshield time and ensures crews are on time for their next job.

The system assigns subcontractors or employees based on availability and job requirements.

Commercial cleaning businesses can quickly adjust the schedule for urgent clients or last-minute changes and sync updated routes to team members’ mobile devices with the offline-capable mobile app.

Learn more about Aspire’s scheduling features.

Real-time tracking and performance monitoring

The Aspire Mobile app geotags clock-in and clock-out data so businesses can track labor costs for individual work tickets. 

Customers, operations, and team members in the field can all create issue tickets to highlight problems on the property with image and video uploads. 

Checklists ensure that teams complete all the required tasks for a job. They also help with property audits to ensure exceptional service delivery or highlight areas for improvement.

Accurate invoicing and payroll management

Aspire automates invoicing and payroll, reducing errors and late payments. With filters, you can see upcoming, due, and aging invoices, and use bulk actions to send multiple invoices quickly. 

Use Aspire to pay subcontractors for completed jobs or pay employees for hours logged directly into the system–no more annoying and inaccurate paper timesheets or siloed software systems.

Explore Aspire’s invoicing and accounting tools.

Detailed reporting and analytics

With detailed, real-time reports, Aspire tracks business expenses, job profitability, and workforce efficiency.

Business owners can see custom analytics when they matter—when growth opportunities and cost reduction areas first become apparent, and there’s time to make informed decisions focused on improving performance.

See how Aspire’s reporting features drive business success.

Compliance and record-keeping

Aspire enables HR and payroll to assign workers in the system to be identified as either “Employee” or “Sub” for subcontractors. 

Assign employees and subcontractors a PIN, enabling them to log in to the Aspire Mobile app to track time. The pay rates section of payroll lets HR assign pay rates and the cost to the company for accurate labor cost tracking on open work tickets. 

Easily manage subcontractor agreements, liability insurance, and employee benefits all within the platform.

With Aspire’s cleaning business software, you can manage the workforce, reduce admin stress, and grow your cleaning business.

It’s your turn now

Choosing subcontractors or employees affects costs, flexibility, and business growth.

Subcontractors offer scalability and lower admin costs, while employees provide stability and quality control.

Consider your business needs, compliance, and long-term goals when making this decision.

Regardless of your choice, Aspire’s cleaning business software simplifies workforce management, scheduling, and payroll.

Book a free demo today and see how Aspire helps you run a more efficient cleaning business.