How to Set a Billing Rate When You Work With a Subcontractor

You land a project that needs someone else. A developer, a copywriter, a designer. You bring them in, manage the work, deliver to the client. Simple enough until you try to figure out what to charge.

Most people just add the subcontractor's rate on top of their own and hope the client does not push back. That is not a pricing strategy. That is guessing with extra steps.

Understand What You Are Actually Selling

When you bring in a subcontractor, your role changes. You are no longer just doing the work. You are sourcing it, briefing it, reviewing it, and guaranteeing it. That coordination takes time. Real time. And it needs to show up in your rate.

Before you quote the client anything, track what coordination actually costs you on similar projects. How many hours did you spend on briefing, revision rounds, back-and-forth, and quality review? That number becomes part of your rate calculation, not an afterthought.

Set Up a Management Rate Separate From Your Delivery Rate

In your time tracker, create two billable task types for projects involving subcontractors. One for direct work you produce. One for coordination and oversight.

These can carry different billing rates. Your coordination rate should reflect the responsibility you carry, not just the hours. You are the one the client calls when something is wrong. That has value.

In [Time-Trak](https://time-trak.com), you can assign different rates to different task types within the same project. Set them up before the project starts. Log your hours against the right type as you go. Do not try to split them at invoice time from memory.

Account for the Subcontractor's Time in Your Budget Tracking

Your project budget needs to include their hours even if you are not logging their time yourself. Create a budget line for subcontractor cost. As you pay invoices from them, track what that spend looks like against the project total.

If you are running a fixed-fee project, this matters a lot. You need to know whether the project is still profitable as it moves forward, not only when it ends and you do the math.

A simple way to do this in practice: after each week, check your time log against the subcontractor's reported hours. If the combined total is trending past budget, you catch it early. Not on the last day.

Decide How to Present Costs to the Client

Some clients want a fully blended rate. You charge one number per hour regardless of who does what. This is clean and simple. The risk is that your blended rate needs to be high enough to cover your subcontractor's cost plus your margin plus your management time.

Other clients are fine with a breakdown. You show your rate, their rate, and your coordination hours separately. This works when clients are detail-oriented or have procurement requirements.

Either way, know your floor. The minimum you need to charge for the project to be worth taking. That number comes from your time data, not intuition.

Raise Your Rate to Cover the Risk You Are Absorbing

If the subcontractor misses a deadline, you deal with it. If their work needs another revision round, you manage it. If the client is unhappy, you answer for it. That responsibility should be reflected in what you charge for management hours.

Look at your last two or three subcontracted projects. Pull the time logs. Calculate what you actually earned per hour once you account for coordination time that was not billed or was underestimated. If that number is lower than your solo work rate, your management rate is too low.

Fix it before the next project. Not mid-project, and not after you are already locked into a quote.

Subcontracting can grow your capacity and your revenue. It only works if the math works first.

Track your time, bill every minute.

Time-Trak is a native Mac and Windows time tracker with a floating timer, automatic screenshots, and one-click invoicing.

Free during beta.

macOS + Windows · Floating widget · Auto screenshots