As a builder using non-GST-registered contractors, do I add GST to the principal (before margin) when charging the client? Or does the client not pay GST for that service, as the contractor is exempt?
e.g.
Scenario A:
Contractor GST exempt -$100
Margin 15% - $15
GST - $11.50
Total - $126.50

or, Scenario B:
Contractor GST exempt -$100
Margin 15% - $15
GST - $1.50
Total - $116.50

who is paying the contractor??? It sounds like you are engaging the subbie, and then you are charging the client.

On that basis the client is not paying for the subbie, they are paying you. And you are registered for GST, so they pay GST on your invoice. All of the invoice, not some of it.

and then you will claim GST on those expenses from subbies that you pay ......but only claim GST on subbies that are registered for GST and provide a valid GST invoice.

EG
subbie 1 costs you $10,000 (not registered for GST)
subbie 2 costs you $11,000 (including $1,000 GST)
total net cost to you is $20,000
you claim a GST credit of $1,000 in your BAS

you add your margin of (say) 25% to the cost

cost $20,000
margin $4,000

invoice to client $24,000+GST of $2,400 = $26,400

you include $2,400 GST payable in your BAS

net profit to you is $4,000

hope this helps