A contractor is hiring a subcontractor to do work (both are HST registered).
The contractor has an account with home depot, which he tells the subcontractor to use when picking up the supplies for the job.
(Note: the contractor is aware of the differences between an employee and subcontractor - RC4110 Employee or Self-employed? Has been reviewed)
The contractor tells the subcontractor he will get $10,000 + HST for the job less the supplies.
Supplies $2,000 + HST.
Net pay to the subcontractor is $9,040.00
$11,300 ($10,000 + HST) less $2,260.00 ($2,000.00 + HST)
Can anyone share their thoughts on this process and/or an alternative they see better fitting.