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A contractor bids on a complete project such as constructing an office building. He will watch as each part of the building comes together. He will put out for individual bids from subcontractors who will do the actual work on the various sections. i.e. Foundation subcontractor, Electrical subcontractor, Drywall subcontractor, etc., etc.. The Contractor is akin to the conductor of a symphony orchestra; he waves his wand and the drummers drum, the trombone slides and the trumpets blare. (Drywall subcontractor since 1960).

generally sub contractors work for a general contractor.

For example if I am going to build a house, I hire a general contractor, he will sub out the foundation, framing, roof etc, to subcontractors.

I'm building and addition and I hire an foundation person, I'm looking to an independent contractor to do that work.

So, an independent contractor can be both an independent and a subcontractor on different jobs.

The main differences have already been mentioned. I can tell you though that as a 1099 contractor (that's what you would be), there are quite a few benefits. The biggest one is that many more expenses are now deductible from your income taxes. I would advise you though to register a company, with you as the main employee, to be the contractor. By doing that, you get a few benefits: 1. Should you not be able to get health insurance benefits through your employer (usually 1099 contractors are covered somewhere in their policy - i know, i have 1099 contractors, and they are covered...) you would be able to hire your spouse as a 2nd employee - just make sure you pay them too! By doing this, in many states, you qualify for group benefits, which will allow you to save money on insurance premiums. 2. As a company, you would not be liable (provided you set the organization up correctly) for damages. Anything other than an LLC or C-Corp can leave you personally liable, meaning your bank accounts, house and every other tangible item you have, plus future earnings are at risk. Register wisely. 3. In the even that your current employer goes out of business, or needs to let you go, you will still be eligible for unemployment - you'll be paying the unemployment insurance premium as a part of your payroll taxes, which will help protect you in the need you require such benefits. Talk to your accountant, and a good attorney before you do anything, but there are quite a few benefits like i said to being a 1099 contractor. Just my 2 cents. J

A subcontractor works under another contractor and an independent contractor works for his/her self.

By example, let's say you contracted a company to build a house for you. The building company would most likely sub-contract (& work for the original contractor vs. you) to clean up the job site and do all the janitorial (in the house) clean up before you took possession of the house.

House builders (tradesmen) aren't into cleaning windows :)

That's just one example ~ yet, nut shell, the sub-contractor is any other company that is hired by the contractor to do work for the contractor and is paid by them as well.

An independent contractor is simply one works for him or herself, such as a carpenter or painter, or in my case, a garage door contractor. They can also sub-contract to another contractor. For example, a general contractor is building a house. He hires carpenters, plumbers, electricians, etc. to do the actual work, while he deals with overseeing the project. In that case, the other contractors are sub-contracting to him. A sub simply works for another contractor. Hope that clears it up.