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What is a Statement of Work?

A Statement of Work (SoW) is an agreement between two businesses that typically defines key deliverables to be achieved, to consider a project satisfactorily complete and therefore secure payment. They do not replace a contract, and usually will be used alongside one – particularly where services are outsourced.

Typically, when supplying labour, assignments are delivered on a contract for services and paid on a time basis e.g. an agreed hourly or daily rate, whereas working via a SoW will usually see payments agreed based on milestones that need to be reached.

For more information about Statement of Works and relevance to the IR35 reforms, read our article Ensuring IR35 Compliance: Statement of Work.