Subcontractor Crews vs In-House: The Real Cost Comparison

Every roofing owner asks: in-house crews or subcontractors? Both work. The right answer depends on volume, seasonality, and how much management bandwidth you have. Most $2M shops land on hybrid: core in-house for quality and continuity, subs for overflow and specialty work.

Cost Per Square: The Headline Comparison

CategoryIn-HouseSubcontractor Labor cost per square$55 to $75$65 to $90 Workers compYes (4 to 8% of payroll)Sub carries own BenefitsYes (15 to 25% of comp)No Equipment and toolsCompany providesSub provides TrainingCompany investsSub brings skill Management overheadHigherLower per crew

Surface-level cost per square favors in-house. But in-house carries fixed cost whether you have work or not.

True Cost Analysis

In-House Fixed Costs

• Crew lead: $55k to $75k base
• Helper 1: $40k to $55k
• Helper 2: $40k to $55k
• Truck: $500 to $800/month lease
• Tools and equipment: $500/month amortized
• Workers comp: $8k to $18k/year on crew payroll
• Benefits (health, 401k): $15k to $30k/year

Annual fixed cost per crew: $190k to $270k.

Break-even: 80 to 100 roofs per year per crew.

Subcontractor Variable Costs

• Pay per roof or per square
• Only pay when work is done
• No fixed overhead
• No benefits, no workers comp (they carry own)

At 80 roofs/year at $1,200 average labor: $96k paid out, vs $190k fixed for in-house. Subs are cheaper at low volume.

Break-even flips: in-house gets cheaper above ~120 roofs/year/crew.

When In-House Wins

1. You have consistent year-round volume (120+ roofs per crew)
2. Quality is a differentiator in your market
3. You sell premium products requiring manufacturer-certified installers
4. Customer complaints are rare (below 5 percent)
5. You want to build a crew that stays 3+ years

When Subs Win

1. Volume is seasonal or unpredictable
2. You are scaling fast and cannot hire quickly
3. Specialty work (tile, metal, flat roof) you do not do often
4. Markets with good sub crew depth (Texas, Florida, Colorado)
5. You lack management bandwidth for direct crew oversight

Liability and Workers Comp

In-House

• Your workers comp covers injuries
• Your general liability covers damage
• You bear OSHA compliance directly

Subcontractors

• Subs carry their own workers comp and liability
• You verify annually: insurance certificate, OSHA training, worker status
• Without verification, you are liable if sub is uninsured

Verification Checklist

• Certificate of general liability ($1M minimum)
• Workers comp certificate
• Contractor license (if applicable)
• W-9 form
• Safety training records
• Annual insurance renewal verification

Quality Control

In-House

Full control. You train, inspect, correct. Consistency is high. Warranty claims are owned by you.

Subs

Variable. Good subs produce great work. Bad subs produce warranty claims. Pre-screen:

• Check completed jobs with customer references
• Watch first install closely (job walk at start, mid, finish)
• Document quality issues, enforce corrections
• Fire subs who produce more than 2 warranty claims in 90 days

Seasonality Flex

Roofing is seasonal in most markets. Work peaks April to October, drops 40 to 60 percent in winter.

In-House Problem

You pay crews year-round or lay off and lose them. Layoff and rehire every spring burns relationships.

Sub Solution

Scale sub pool up in season, scale down off season. Subs work for multiple GCs and spread their own risk.

Hybrid Answer

Keep 1 to 2 core in-house crews year-round. Use subs for overflow April to October. Most mid-market shops run this model.

Payment Terms for Subs

• Standard: net 7 days after customer acceptance and photo sign-off
• Faster (net 3 to 5): get better sub crews
• Pre-pay partial on materials for large subs
• Retainage: 10 percent held 30 days for warranty issues

Finding Good Subs

• Your supplier rep knows every crew in the market
• Other roofing companies (non-competitors) will refer reliable subs
• Insurance adjusters know which crews produce clean work
• Local Facebook groups for roofing pros

Interview and test on 1 small job before running volume through a new sub.

Sub Classification Rules

Must be legitimate subcontractors, not misclassified employees:

• Sub sets own schedule
• Sub provides own tools and vehicle
• Sub works for multiple companies
• Sub bills on invoice
• Sub carries own insurance

If the sub works only for you and you tell them when to arrive, they are likely an employee. See our tax withholding guide.

The Hybrid Model

Most $2M to $10M roofing shops run:

• 1 to 2 in-house crews (lead + 2 helpers each)
• Pool of 3 to 8 subcontractor crews on call
• In-house handles: premium jobs, warranty repairs, challenging installs
• Subs handle: standard installs, overflow, specialty work

Management Bandwidth

Each in-house crew needs ~5 hours/week of management (scheduling, QC, payroll, complaints). Each sub crew needs ~3 hours/week.

10 crews = 40 to 50 hours/week of management. This is why you need an ops manager past 5 crews.

RoofKnockers Tracks Both

Crew assignment, material cost, job costing, and quality metrics apply equally to in-house and sub crews in RoofKnockers. See pricing or start a trial.

FAQ

How much do subs make per square?

$65 to $90 labor on standard asphalt shingle in 2026. Premium work or difficult installs: $100 to $150+ per square.

Can we require subs to only work for us?

No. Exclusivity converts them to employees for legal purposes. Subs must be free to work for others.

How do we handle callbacks and warranty with subs?

Written sub agreement: first callback free, second callback charged against next payment. After 3 callbacks, sub is removed from rotation.