Yes, any amounts you spend, whether pursuant to a contract or otherwise (e.g. without a contract, just because it is appropriate or a good idea) which are legimately for business (to buy inventory, to provide services, etc.) is a business expense and is tax deductible. So say you are paid $30k but have to spend $6k to complete the contract. You net taxable income would be $30k - $6k = $24k.