Is marking up a subcontractor ethical?

Yes, it is the price of the value you add: finding them, vetting them, managing them, and guaranteeing the result to your client. Agencies run on exactly this; the markup pays for accountability.

Should I tell the client I subcontract?

Check your contract first; many require disclosure or consent. Beyond legality, quiet subcontracting risks the relationship if discovered. 'My team' framing with client consent is the durable version.

My net margin is tiny. What moves it?

Reduce management hours (better briefs, fewer review rounds) before raising the markup: process improvements compound across every subcontracted job, and clients never see them.

Small business

Subcontractor markup calculator

Reselling a subcontractor at cost is charity; marking up without counting your management time is self-deception. This prices the job with both eyes open: their cost, your markup, and the hours you spend making their work deliverable.

Your numbers

Currency

Subcontractor cost

What they invoice you for the job.

Your markup

30-100% on freelancer cost is the common band: it covers risk, management, and warranty.

Your management hours

Briefing, reviews, integration, client back-and-forth about their work.

Your hourly rate

What those hours are worth.

Results

Price to your client$2,800

Net profit after your time: $400
Markup profit: $800
Your management time cost: $400
Net margin: 14.3%

Estimate

workingfigures.com/calculators/subcontractor-markup-calculator

The formula

Client price = sub cost × (1 + markup). Net profit = markup profit − (management hours × your rate). If net goes negative, the markup was decoration.

What this ignores

Payment risk (you pay the sub even if the client pays late; net terms cost money), quality risk (rework beyond your estimate), and whether your contract allows subcontracting at all. Check it before quoting.

FAQ

Is marking up a subcontractor ethical?: Yes, it is the price of the value you add: finding them, vetting them, managing them, and guaranteeing the result to your client. Agencies run on exactly this; the markup pays for accountability.
Should I tell the client I subcontract?: Check your contract first; many require disclosure or consent. Beyond legality, quiet subcontracting risks the relationship if discovered. 'My team' framing with client consent is the durable version.
My net margin is tiny. What moves it?: Reduce management hours (better briefs, fewer review rounds) before raising the markup: process improvements compound across every subcontracted job, and clients never see them.