Question 1

What is a back charge in construction?

Accepted Answer

A back charge is a deduction made by a head contractor against a subcontractor for damage, defect rectification, or work the subcontractor was alleged to have caused or failed to do.

Question 2

How can subcontractors reduce back charges?

Accepted Answer

Maintain a written Scope of Works, log every variation, photograph site conditions before commencing trade, and respond to alleged back charges with clause references within 48 hours.

Question 3

What is the average back charge cost in Australia?

Accepted Answer

Australian commercial subcontractors typically receive 3–8 back charges per year on a $2M project, averaging $2,500–$5,000 each. Total annual exposure ranges from $7,500 to $40,000 without documentation.