Subcontractor Margin

Model your gross margin, risk exposure, and effective hourly rate when subcontracting work.

Rate billed to client (per hour) $175

Rate paid to subcontractor $95

Subcontractor hours on project 80 hours

Your management hours 12 hours

Your billable rate $200

Quality risk markup needed (%) 10%

Net margin per hour

After paying sub and accounting for your time

Total project margin

Gross margin %

Per-hour P&L on subcontracted work

💡 Sub margin insight

Subcontractor Margin Calculator

The Subcontractor Margin Calculator models the gross margin, risk exposure, and effective hourly rate on work you deliver through a subcontractor. You enter the rate you bill the client, the rate you pay the sub, the subcontractor hours, your own management hours, your billable rate, and the percentage you reserve for quality risk. The calculator returns net margin per hour, total project margin, and gross margin percentage. Use it before quoting any project that you intend to subcontract more than half of. Below thirty-five percent gross margin the management overhead and quality risk usually erase the spread, and you would have been better off declining the work or doing it yourself.