What Are Typical Subcontractor Margins?

Every subcontractor has asked the same question at some point: Are our margins normal, or are we leaving money on the table?

It’s a tough benchmark to pin down. Margins vary by trade, region, bid strategy, and how well a company controls scope creep. But our 2025 Subcontractor Survey gives a clearer picture of what subcontractors are actually earning today and why margins feel tighter than ever.

Here’s what the data says, plus how subs can protect the profit they already work hard to win.

Most Subcontractors Are Sitting in the Same Margin Range

Across industries like construction finishes, specialties, MEP, openings, and equipment supply, subcontractor margins tend to fall into a predictable band.

Industry research from sources like Construction Dive, Dodge Data, and CFMA shows that typical subcontractor margins land between 8 and 15 percent, depending on trade and market conditions.

Our survey of 100 U.S. subcontractors backs this up. Even though respondents didn’t report exact percentages, their behavior around bidding, software investment, and filtering priorities reflects an environment where margins feel tight and must be protected at every step.

Most firms said the same thing: margins are workable, but small mistakes erase them fast.

The Biggest Threat to Margin Isn’t Labor or Material Costs. It’s Chaos.

Subs are used to fluctuating material prices and labor shortages. What hurts margin more consistently is disorganization.

The survey highlighted three patterns that hit margins hardest:

• Poor filtering leads to low-quality bids
• Scope clarity is inconsistent
• PM-driven teams often double-handle or rework tasks

Filtering the right opportunities was the top challenge for 73% of subcontractors, regardless of size. When the wrong jobs slip through or when the team spends too much time sorting junk bids, profit takes a hit before pricing even begins.

Subs also told us that they lose time and money on scope issues. Missing items, miscommunication, and outdated documents all chip away at margin.

Margins aren’t shrinking because subs can’t estimate. They shrink because the workflow around estimating is messy.

Margin Pressure Gets Worse as Bid Volume Rises

Mid-size firms (31 to 60 employees) often submit 16 to 30 bids per week. At that pace, clarity becomes a competitive advantage. One misplaced email or missed addendum can wipe out the profit on a job or, worse, turn a good-looking project into a headache with razor-thin returns.

Larger firms feel pressure in different ways. Many still rely on PMs to handle bidding, which causes scope inconsistencies and slower turnaround times. Even when the company wins the right work, execution problems eat away at margins during the project.

Margin isn’t about estimating skill. It’s about controlling the process.

Smaller Subs Face a Different Margin Challenge

Subs with 1 to 10 employees said their biggest issue wasn’t willingness to adopt tech but simply time. When owners, estimators, and PMs are often the same person, it becomes hard to compare jobs, price consistently, or follow up with GCs in a structured way.

Time pressure leads to rushed estimates, and rushed estimates lead to thin profits.

These firms usually operate at the lowest end of the margin range, not because the work is priced incorrectly, but because there’s no breathing room in the workflow.

Why Subs in the 11–30 Range Are Seeing the Healthiest Margins

Our survey consistently showed that this group is the most tech-forward. 94% identified as early adopters, and 83% spend at least three percent of their budget on software.

This group also said they have clearer processes, cleaner handoffs, and faster turnaround on estimates.

It’s not that tech magically increases margin. It’s that structure reduces the noise that normally eats profit.

External Benchmarks Support the Survey Findings

Industry studies paint a consistent picture:

• Specialty trades like drywall, flooring, acoustics, glazing, and millwork often target 10 to 12%.
• MEP trades often sit closer to 8 to 10%.
• High-risk or specialty equipment trades may reach 15% or higher, depending on project type.
• GCs often operate at 3 to 6 percent, which pushes more scope and risk onto subs.

Margins aren’t “bad,” but they’re fragile. The market rewards subs who stay organized and penalizes those who run the business from an inbox.

Protecting Margin Starts Before the Estimate

The survey makes one thing clear: controlling margin begins long before numbers hit a spreadsheet.

Healthy-margin subs do three things well:

• Filter aggressively
• Build consistent workflows between PMs and estimators
• Keep data in one place so nothing slips

Most subs are not losing money in Excel. They’re losing money in Outlook.

What This Means for Subcontractors

Margins will always fluctuate, but the most profitable subcontractors keep their process clean. They reduce chaos, organize bids in one place, and make sure the whole team works from the same source of truth.

A simple, structured workflow protects profit better than any spreadsheet trick.

That’s why we’re building RiffleCM. A smarter way to manage ITBs, estimates, and internal coordination so subcontractors can protect the margin they already earn.

Join the waitlist at rifflecm.com.

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