Hiring a subcontractor and passing their bill straight through to your client sounds fair, but it quietly prices your own work at zero. You still sourced the sub, vetted their quote, scheduled the job, fielded the client's questions, and you're the one who eats the cost if the work needs to be redone. This calculator takes what a subcontractor is charging you and the markup percent you want to apply, then shows you the client price, your dollar profit, and the margin that profit actually represents — so you can quote with confidence instead of guessing at a round number.
How it works
Enter the subcontractor's cost — what they're actually invoicing you for the work — and a markup percentage that covers your project management time, coordination, and the warranty risk you're carrying by putting your name on someone else's labor. The calculator multiplies the cost by one plus your markup to get the client price, subtracts the original cost to show your profit in dollars, and divides that profit by the client price to show your margin as a percentage.
That last step matters more than it looks. Markup and margin are not the same number, even though it's easy to mix them up when you're quoting quickly. Markup is profit measured against what you paid the subcontractor; margin is profit measured against what the client actually pays you. Because the client price is always bigger than the subcontractor's cost once there's any profit at all, your margin will always read lower than your markup percentage — sometimes by a lot.
Worked example
Say a subcontractor quotes you $1,000 for a piece of a project, and you apply a 30% markup.
- Client price: $1,000 × (1 + 30%) = $1,300
- Your profit: $1,300 − $1,000 = $300
- Your margin: $300 ÷ $1,300 × 100 = 23.08%
That $300 is real money for real work — chasing the subcontractor's availability, checking their output against the client's expectations, and being the one who answers for it if something's wrong. But notice the gap: a 30% markup only nets a 23.08% margin. If you were mentally targeting "30% of the deal," you're actually keeping less than a quarter of the client price, not nearly a third.
How to interpret your result
The client price is what goes on the invoice, but the margin is the number that tells you whether the deal is actually worth your time. A thin margin on a subcontractor pass-through means you're carrying real coordination risk and warranty exposure for very little return — worth doing occasionally to keep a client relationship intact, but not something to build a business around at scale.
If the margin looks lower than you expected, the fix isn't necessarily a bigger markup on every job. It's matching the markup to the actual risk: a subcontractor you've used for years on routine work can carry a thinner markup, while an unfamiliar trade, a tight deadline, or a job where a callback would be costly and embarrassing deserves a heavier one. The markup is compensation for the specific coordination and liability you're taking on for that job, not a flat tax you apply out of habit.
Methodology & sources
The formulas: clientPrice = subcontractorCost × (1 + markupPercent / 100), yourProfit = clientPrice − subcontractorCost, and marginPercent = (yourProfit / clientPrice) × 100, with all three outputs rounded from their unrounded intermediates so they stay internally consistent with each other. If the subcontractor cost is $0, margin is reported as 0% rather than an undefined division.
There's no single "correct" markup — it depends on trade, region, and how much risk you're absorbing — but industry guidance for general contractors reselling subcontractor and material costs commonly lands in the 15% to 20% range, with wider spreads for specialized or high-risk trades. Method's general contractor markup guide walks through how that range gets set and why it varies by category of cost. Treat any published range as a starting point, then adjust up or down based on how much oversight and warranty risk this particular subcontractor and job actually carry.