By the yourtinyoffice team · Published 16/10/2026 · updated 29/10/2026

Subcontracting as a freelancer: how to bill a partner's hours to your client

At some point a project is bigger than you. You bring in a designer, a second developer or a translator, and suddenly there are two people's hours on one invoice. This article covers how the money flows, which three deal shapes work in practice, what to expect on the VAT side, and how shared projects in yourtinyoffice remove the timesheet shuffle.

Two contracts, two invoices

Your client has a contract with you, and only with you. Your partner has a contract with you, and only with you. That is the whole model, and it decides how the invoices look, because a business issues an invoice to the business it supplied (European Commission, VAT invoicing rules; § 14 UStG in Germany):

• You invoice the client for everything delivered on the project, your own work and the partner's. The client sees one supplier and one invoice.
• The partner invoices you for their part, at the price the two of you agreed. That invoice is a cost in your books.
• The difference between what you bill and what the partner bills you is your margin for finding the client, managing the project and carrying the risk.

What does not work: the partner invoicing your client directly for "their" hours while you invoice the rest. The client did not order from the partner, and you would have no basis for your own margin.

Three ways to agree the money

Most arrangements between freelancers fall into one of three shapes. Pick one per project, write it into the e-mail you send the partner, and the invoices follow from it.

The first shape is the most common one and the one where things go wrong: hours get e-mailed as a spreadsheet, retyped, billed twice or forgotten. The second shape needs no time tracking at all. The third one is where a tool must know that these hours are tracked but not billed.

Not sure what your own rate should be, or how much margin a resale rate leaves you? The free hourly rate calculator works out the rate you need from your income target, costs and billable hours.

What about VAT?

Your partner's invoice to you is an ordinary business-to-business invoice. If you are both in the same country, it carries that country's VAT, unless the partner uses the small business exemption: then it shows no VAT (EU SME scheme, § 19 UStG in Germany, small businesses in Austria). If the partner is in another EU country, the reverse-charge rule usually applies: business services are taxed where the customer is established (European Commission, place of taxation), so the invoice shows no VAT, carries both VAT IDs and the note "Reverse charge" (EU invoicing rules), and you declare and pay the VAT yourself in your own country (Your Europe, cross-border VAT; in Germany § 13b and § 14a UStG, in Austria the Business Service Portal). The rules per country, the small business thresholds and the mandatory invoice details are in our guide to invoice VAT rules in the EU.

Your own invoice to the client does not change because a subcontractor did part of the work. It follows the rule between you and your client, as it would for any other invoice, because the VAT treatment depends on who supplies whom (place of taxation). As always: this is how the rules usually work, not tax advice for your case.

Where it usually goes wrong

• Timesheets by e-mail. The partner sends a spreadsheet at the end of the month, you retype it, and a typo becomes an invoice dispute.
• Hours billed twice or never. Without one list of what is still open, the partner's hours from the 30th end up on next month's invoice, or on both.
• Edits after the fact. The partner corrects an entry after you have already invoiced it, and now your invoice and their invoice disagree.
• Rates mixed up. Your resale rate for the partner's hours is different from both your own rate and the partner's rate. Three numbers, one column in the spreadsheet.

How shared projects work in yourtinyoffice

yourtinyoffice solves this by sharing a project between two accounts instead of sharing a spreadsheet:

1. Invite the partner by e-mail on the Partners page (Pro). They accept in their own yourtinyoffice account, on any plan, the free one included. You never share a login.
2. Tick the projects they may work on. For each one you set what the partner gets, an hourly rate or a fixed amount per month, and what you bill the client: the rate for their hours, or nothing extra because it is part of your fixed price.
3. The partner books time in their account as usual, on the shared project. A fixed position like "1 month hosting" works too: they enter the unit and quantity instead of hours.
4. Every entry appears in your time list, tagged with the partner's name, at your rate for them. Entries of a fixed-price share are shown but kept out of invoices and recurring plans. Edits and deletions on the partner's side follow until you invoice the entry; then it is locked for both of you.
5. You invoice the client from the time drawer with a tap, or let a recurring monthly invoice pick up all open hours of the project, yours and the partner's.
6. The partner invoices you from their own account at the deal you set on the share: an hourly rate, fixed on their side if you want, or a monthly amount that is drafted as a recurring invoice to you on the 1st. They never see your resale rate.

The result is one list of what is open, no retyping, and two invoices that always agree on the hours. If you are the subcontractor in another freelancer's project, it works the same way around: they share, you book, you invoice them.

Sources

• European Commission: VAT invoicing rules
• European Commission: place of taxation (Article 44 VAT Directive)
• Your Europe: cross-border VAT
• European Commission: VAT rules for small enterprises (SME scheme)
• § 13b UStG, § 14 UStG, § 14a UStG, § 19 UStG (Germany, German)
• Austrian Business Service Portal: cross-border services (German)
• Austrian Business Service Portal: small businesses (German)

Status 29 October 2026. This article is not legal or tax advice. Check the sources above or ask your tax advisor before you rely on a detail.