Business Tips
How to Subcontract Freelance Work Without Mixing Up Two Rate Cards
Subcontracting freelance work creates two clocks the moment you say yes: what the client pays you, and what you pay the person who actually did Tuesday. If those numbers live in one undifferentiated timesheet, you will invoice confidently and still not know whether the overflow made money.
This is not an agency-operating system. It is the situation most independents actually hit: a retainer that spiked, a launch week you cannot staff alone, a specialist you trust for a slice of implementation. You remain the client relationship. Someone else now has hours that will show up on your invoice — or should not show up, depending on how you structured the deal.
Keep two rates visible on every shared hour: the billable rate the client sees, and the internal cost you pay the subcontractor. If you only store one number, you are guessing at margin after the PDF has already gone out.
This is not tax or legal advice. Classify contractors correctly, write a real subcontract, and talk to an accountant about how you pass through cost. The rest of this post is the operational habit: how to track the work so the invoice and the margin story do not contradict each other.
Name the deal before anyone starts a timer
Subcontracting fails in the first email, not in the timesheet. You need four sentences in writing, even if the person is a friend:
- Who the client is allowed to meet. Some buyers want a single throat to choke. Some want to talk to the implementer. Decide before a Slack invite appears.
- What they can log. Which project, which tasks, which days. “Help with the redesign” is how you get time on the wrong client.
- What they get paid. Hourly to you, a flat slice, or a percentage of a milestone. That number is your internal cost. It is not automatically the client rate.
- What the client is billed. Your rate, a blended rate, or a fixed fee that does not itemize the sub at all. Those are three different invoices.
If the client is on a fixed price, the subcontractor’s hours are a cost of delivery, not a line they should see. If the client is hourly, you still may hide the sub and bill your rate — or you may show two people with two rates. Either is fine. Surprise is not.
The failure mode: one column that means two things
Most solo trackers have a single “rate” field. You type $150 because that is what you tell clients. Then you hire someone at $70. Then you export a report and multiply hours by $150 as if the week were all you. The invoice looks healthy. Your bank account does not.
The opposite mistake is also common: you lower the invoice rate to the sub’s rate “to be fair,” and donate the client relationship, QA, and the 11 p.m. Slack. You were not a pass-through payroll. You were the vendor of record.
A workable model is boring:
Two numbers per person, one invoice story
- Billable rate. What this person’s time is worth on the client PDF — your rate, their rate, or a blended rate you already disclosed.
- Internal cost. What that hour costs you. For you, it might be $0 in the tool (you take profit as owner). For a sub, it is what you actually pay them.
- Tasks that match the work. Implementation vs meetings vs review. If the sub does implementation and you do client calls, those should not collapse into “Project work.”
When both numbers exist, a weekly report can answer the only question that matters: after paying the sub, did this client still pay for your judgment?
Give the other person a lane, not your whole workspace
Sharing a login is how subcontracting becomes a security incident. Invite them as a user. Put them on a team if you have more than one extra pair of hands. Restrict the project to the people who should see it. They log time on tasks. They should not need your other clients, your notes widget, or your billing settings.
A few hygiene rules that prevent Friday archaeology:
- Create the client → project → task tree before they start. Do not let them invent a parallel taxonomy in a spreadsheet.
- Assign leaf work. If a task has subtasks, the assignee belongs on the leaf, not on the parent.
- Lock or close tasks when that slice is done so leftover timers cannot keep billing a finished phase.
- When the engagement ends, disable the user rather than deleting history. You still need those hours for the post-mortem. You do not need to keep paying a per-user seat for someone who has left.
Read their entries before you invoice. A subcontractor who logs “misc” for six hours is a briefing problem you can still fix this week.
Invoice the client for the deal you sold, not for your private payroll
A report should be able to slice What (this client or project), Who (you, the sub, or the team), and When (the period). From there you choose the invoice shape:
- One blended line. Client never sees two names. You still inspect Who internally so you know the cost.
- Two people, two rates. Only if the statement of work said that. Do not surprise a buyer with a stranger’s name and a stranger’s rate.
- Fixed fee plus a time appendix you do not bill. Useful when you promised a number and used a sub to hit the date. The appendix is for you.
Additional flat lines belong on the invoice when you passed through a license or a specialist day rate that is not time-shaped. That is still not accounting software. It is “do not make the client reverse-engineer a second product.” For the weekly ritual that keeps this from becoming a panic, see invoice hygiene before Friday. For the rate math itself, use the billable rates guide and the reports guide.
If the subcontracted slice is a fixed-price risk, a tracker on the project — estimate, budget, percent consumed — is more useful than staring at a running timer. Timers say what is happening right now. Trackers say whether the overflow is about to eat the fee. The trackers guide is the longer version of that distinction.
When subcontracting is the wrong move
If you cannot explain the two rates in one sentence, do not hire yet. If the client required you specifically, a silent substitute is a trust problem. If the work is sold as your taste and the sub will make the taste, you are not subcontracting implementation — you are reselling someone else’s product under your name. That can be a fine business. It is a different business. Price it like one.
If the same client needs a sub every month, you do not have a busy week. You have a retainer that is understaffed, or a rate that cannot buy the help the work requires. That is a cashflow and retainer conversation, not a timesheet conversation.
How MinuteShark models the two rate cards
MinuteShark is built for consultants and tiny teams, not for a fifty-person agency as the default story. If you invite a subcontractor, they are a user in your workspace. You can group users into teams, give team leaders a view of their people, and keep Admin vs Regular User permissions boring: regular users see their own time; you see reports when you have the right role.
Cost profiles are named financial rules. Per user and/or team you set a billable rate and an internal cost. If both a user and a team value exist, the user wins. Currency is a free-text symbol or code. Admins configure this; it is not something a Regular User should improvise on Friday. Generate a report (What × Who × When), then Generate Invoice and pick the cost profile — or enter rates manually if this one PDF is a one-off. Export PDF, DOCX, or CSV. Disabled users stop accruing per-user billing and keep their history.
That is the whole product promise for this problem: a client → project → task tree both of you can log against, two rates that do not overwrite each other, and an invoice that matches the deal you sold. It will not mark the bill paid in an accounting tool. It will keep the two rate cards from collapsing into one hopeful number.