What Is a Good Profit Margin for a Subcontractor in Poland?

Every construction subcontractor eventually asks the same question: “What is a good profit margin for my work?” In Poland, the answer is not always clear. On paper, margins of 15 or even 20 percent may look achievable. In reality, once overhead, travel, scope changes, and late payments are considered, the actual margin is often much smaller.

This is more than a matter of curiosity. Understanding what is a good profit margin is critical for survival. Without a clear benchmark, it becomes difficult to know if you are underpricing your services, competing on fair terms, or slowly eroding your business from the inside out.

In this article, we look at what is a good profit margin for subcontractors in Poland, how margins vary across trades and regions, and how the numbers compare with peers in other European markets.

The Theory vs. Reality of Profit Margins

On paper, subcontractors often target net profit margins of 15–20 percent. With the right pricing and efficient execution, this seems realistic.

In practice, margins are much slimmer. Several factors eat into the numbers:

• Overhead costs such as fuel, equipment, administration, insurance, and travel
• Unexpected delays including weather, late materials, or changes in scope
• Payment practices where subcontractors wait an average of 83 days for invoices, according to Atradius
• Inflation and wage growth that quickly eroded the record profits seen in 2022, as highlighted by Gleeds

The outcome is clear:

• Turner & Townsend confirms that average contractor margins across Europe are modest, often around 7 percent for medium-sized commercial projects
• Many subcontractors operate with real net margins closer to 5–12 percent
• Deloitte notes that even Poland’s largest construction firms struggled to maintain profitability in 2023 despite record revenues

The gap between theory and reality is one of the biggest frustrations subcontractors face. Projects that look profitable during bidding often deliver much less once the real costs are counted. This raises the critical question: what is a good profit margin for a subcontractor in Poland if the numbers on paper rarely match the numbers in practice?

Profit Margins by Trade in Poland

Profit margins are not the same across all subcontractors. Some trades can protect higher margins due to specialization, while others face tougher competition and tighter pricing. Here is how it looks in Poland based on recent market analysis:

• Finishing trades (painting, flooring, drywall)
  • Typically the most competitive segment.
  • Many small firms undercut each other, which squeezes profit margins.
  • Reports suggest net margins often fall to 5–8%. (Deloitte 2024)
• Concrete and masonry
  • Heavy labor costs and frequent delays linked to weather and logistics.
  • Margins are modest, usually around 6–10%.
  • Gleeds highlights wage increases as a key factor tightening profits in this segment.
• Electrical and HVAC
  • Skilled trades with high demand, especially in industrial and infrastructure projects.
  • Subcontractors here often secure higher margins, closer to 10–15%.
  • This aligns with European benchmarks reported in Turner & Townsend’s 2024 survey.
• Plumbing
  • Demand remains steady in both residential and commercial projects.
  • Margins are generally 8–12%, but inflation in material prices continues to cut into profits. (Gleeds 2024)
• Roofing
  • High exposure to weather delays and safety regulations.
  • Margins usually range 7–12%, depending on seasonality and project type.
  • Analysts note that subcontractors often face cash flow strain from postponed payments in this segment. (Atradius)
• Facade systems and insulation
  • Strong growth in energy-efficiency projects has supported demand.
  • Margins sit around 8–13%, depending on project size and material costs.
• Highly specialized subcontractors (automation, industrial systems, niche services)
  • These trades can command margins above 15% due to scarcity of expertise.
  • Still, they are not immune to wage inflation and higher input costs. (Gleeds 2024)
• Carpentry and joinery
  • Custom woodwork and installations are in high demand but materials have become expensive.
  • Margins often fall between 6–10%, depending on specialization and project type. (Gleeds 2024)
• Steel erection and structural works
  • Large projects require specialized crews and equipment.
  • Margins are thin, often 5–9%, because of capital intensity and long project durations. (Deloitte 2024)
• Glazing and window installation
  • Linked to both residential and commercial construction.
  • Margins range 7–12%, but subcontractors face strong competition from mass suppliers.
• Demolition
  • Demand is steady, especially in urban regeneration projects.
  • Margins are around 8–11%, though equipment and disposal costs weigh heavily.
• Landscaping and exterior works
  • Strongly seasonal and dependent on weather.
  • Margins average 6–9%, with higher profit potential for luxury residential or commercial projects.
• Scaffolding and access solutions
  • High safety standards and equipment costs limit profit.
  • Margins often 5–8%, though long-term rental contracts can push this higher. (Turner & Townsend 2024)
• Tile setting and stone work
  • Material quality and craftsmanship can justify better pricing.
  • Margins generally 7–11%, depending on the type of project.
• Painting (decorative, industrial coatings)
  • Competitive trade with many small firms, margins remain thin.
  • Typically 5–8%, consistent with finishing trades overall.
• Groundworks and excavation
  • Heavy machinery costs and fuel prices eat into margins.
  • Net margins often just 4–7%, among the lowest in construction.
• Electrical low-voltage systems (fire alarms, data, security)
  • A growing niche with high demand in modern buildings.
  • Margins can reach 12–15% due to technical expertise and limited competition.

Regional Differences in Poland

Profit margins are not only shaped by the trade. Location matters as well. Demand, competition, labor availability, and client expectations all shift depending on the region:

• Warsaw and Kraków
  • The largest markets with strong demand for both residential and commercial projects.
  • Competition is intense, especially in finishing trades, which drives margins lower.
  • Subcontractors often accept 5–8% net margins just to stay competitive. (Deloitte 2024)
• Wrocław, Poznań, and Tri-City (Gdańsk, Gdynia, Sopot)
  • Balanced markets with steady demand and slightly less cutthroat competition than Warsaw.
  • Margins are closer to the national average, typically 6–12% depending on trade. (Gleeds 2024)
• Eastern Poland (Lublin, Białystok)
  • Smaller projects and lower budgets dominate this region.
  • Competition is high and price sensitivity strong, forcing many subcontractors down to 4–7% margins.
  • Skilled labor shortages push some crews to migrate westward, further tightening capacity.
• Western Poland (Szczecin, Zielona Góra, border regions)
  • Close proximity to Germany creates opportunities to work on cross-border projects.
  • Subcontractors in these areas sometimes achieve 10–15% margins, especially if they can win contracts under German pricing standards.
  • However, regulatory requirements and stricter quality control can raise costs. (Turner & Townsend 2024)

What Is a Good Profit Margin in Poland vs Other European Markets

Understanding what is a good profit margin for a subcontractor in Poland becomes clearer when compared with other countries in Europe. Margins vary widely depending on local demand, competition, and payment culture:

• Poland
  • Large contractors reported growing revenues but tighter operating margins in 2023, according to Deloitte.
  • Rising wages and inflation are squeezing subcontractors further, which makes a good profit margin in Poland closer to 5–12% rather than the 15–20% often targeted. (Gleeds 2024)
• Germany
  • Investment in construction has been falling, reducing pricing power across the supply chain. (FIEC 2025)
  • For subcontractors, what is a good profit margin is usually slightly higher than Poland, often 8–12%, though many larger contractors report returns closer to 7%.
• United Kingdom
  • Margins are among the weakest in Europe. The top 100 contractors reported an average pre-tax margin of just 1.7% in 2024. (The Construction Index 2024)
  • In this environment, subcontractors often operate on razor-thin margins of 3–5%, making survival itself the benchmark for what is a good profit margin.
• Netherlands
  • New build activity declined in 2024, pushing firms into tougher competition. (EIB 2024)
  • Subcontractors here generally consider 6–10% to be a good profit margin under current conditions.
• France
  • National federation data shows a small erosion of margins in 2024 as activity slowed. (FFB 2024)
  • Subcontractors working in urban projects often aim for 7–11% as a good profit margin, though actual results vary.
• Spain
  • Growth is expected through 2025, giving subcontractors more room to protect their margins. (Gleeds 2025)
  • In stronger demand environments like Spain, what is a good profit margin often falls in the 10–15% range.

Takeaway

• In Poland, a good profit margin is typically 5–12%.
• In Germany and the Netherlands, subcontractors aim for 6–12%.
• In Spain, strong demand allows some to achieve 10–15%.
• In the UK, a good profit margin is often as low as 3–5%, making it one of the toughest markets in Europe.

This comparison shows that the answer to what is a good profit margin depends not just on trade, but also on geography and market conditions.

Common Mistakes That Hurt Profit Margins

Many subcontractors in Poland ask what is a good profit margin without realizing how everyday decisions quietly reduce their earnings. Here are the most common mistakes:

• Confusing markup with margin
  • Adding 20% markup does not equal a 20% profit margin. The difference is often misunderstood and leads to underpricing.
• Ignoring overhead
  • Fuel, vehicles, tools, insurance, admin staff, and downtime must be included in cost estimates. Skipping them means margins shrink after the job is done.
• Accepting undocumented change orders
  • Extra work without a written agreement often turns “small favors” into unpaid labor.
• Taking distant or scattered jobs
  • Travel time, fuel costs, and moving crews between sites eat away at margins quickly.
• Relying on delayed payments
  • Waiting months to be paid strains cash flow and makes even a “good” profit margin meaningless.

Tips to Protect and Improve Profit Margins

If you want to secure what is a good profit margin in Poland, focus on these practical steps:

• Calculate correctly
  • Use a profit margin calculator to understand your real margins instead of guessing.
• Track every cost
  • Keep records of materials, labor, and overhead. Accurate numbers give you stronger bids and protect profits.
• Say no to low-margin jobs
  • It is better to skip unprofitable work than to keep crews busy at a loss.
• Specialize where possible
  • Trades like HVAC, low-voltage systems, or facade work often achieve stronger margins than general finishing trades.
• Document work visually and systematically
  • Organized jobsite photos backed by timestamps and location tags help resolve disputes, proof progress, and protect your bottom line.
• Use contracts wisely
  • Always get change orders signed and payment terms clarified.
• Leverage technology
  • Tools like Remato help subcontractors manage costs, track progress, and avoid surprises that eat into margins.

FAQ: What Is a Good Profit Margin?

Key Takeaways

• A good profit margin for subcontractors in Poland is typically 5–12% net after overhead.
• Specialized trades like HVAC, low-voltage systems, and façade work can reach 10–15%.
• Finishing trades such as painting, drywall, and flooring often operate at 5–8% due to heavy competition.
• Anything below 5% is dangerous: one delay or dispute can wipe out profits.
• Compared with Europe:
  • Germany/Netherlands: 6–12%
  • Spain: 10–15%
  • UK: 3–5%

Conclusion

So, what is a good profit margin for a subcontractor in Poland? The answer depends on trade, region, and how well you manage overhead, but the numbers are clear. For most subcontractors, a realistic margin is 5–12%, with specialized trades achieving up to 15% and highly competitive finishing trades sitting closer to 5–8%. Anything under 5% is risky and usually not sustainable.

Knowing these benchmarks is important, but the real test is measuring your own numbers. Many subcontractors believe they are earning 15–20%, only to discover their true profit is much lower once costs are included.

The only way to know for sure is to calculate it. Try our free Profit Margin Calculator and see how your projects compare with the benchmarks in this article. If you want to go further, Remato helps subcontractors track costs, manage schedules, and protect their profits across every jobsite.

In the end, what is a good profit margin is not just a number. It is the difference between staying competitive, building a sustainable business, and ensuring every project you take on actually pays off.