Subcontracting involves which practice?

• A. you hire employees directly to perform the work
• B. you perform work only for yourself without subcontracting
• C. you license your work to another company with royalties
• D. you contract an assignment from a client, then you contract it to someone else for less money than the client is paying you, paying him/her a flat fee or hourly fee with no employee-type deductions

Answer: (D)

Subcontracting is about taking on a client’s project and then outsourcing the actual work to another person or firm under your arrangement. You act as the middleman: the client pays you, you pay the subcontractor, and the workers are typically treated as independent contractors rather than as employees with payroll deductions. This setup matches the description where you contract the assignment from a client and then contract it out to someone else for less money than the client pays you, without employee-type deductions.

This is different from hiring employees directly to perform the work, which would be internal staffing. It’s also not about doing the work solely for yourself with no subcontracting, nor about licensing your work to another company with royalties, which is a licensing arrangement rather than subcontracting.