Wrap rate calculator for government contractors
Build a fully-burdened labor rate from direct labor, fringe, overhead, G&A and fee — and see your wrap multiplier and cost breakdown instantly. The pricing math every federal bidder needs before they quote.
Fully-burdened billing rate
$113.02/hr
Wrap multiplier
2.26×
This uses the common simplified cost buildup — fringe on direct labor, overhead on labor + fringe, G&A on total cost, then fee. Real indirect-rate structures, allocation bases and pools vary by company and must follow your DCAA-compliant accounting system and the applicable FAR cost principles (FAR Part 31). Use this for ballpark pricing and what-if analysis, not as your official rate calculation.
How federal labor pricing is built
On most services contracts, you don’t bill the government an employee’s salary — you bill a fully-burdened rate that recovers the real cost of putting that person to work. Each layer stacks on the last: fringe (benefits, payroll taxes, PTO) loads onto direct labor; overhead (the cost of the operation that supports billable staff) loads onto labor + fringe; G&A (company-wide management and administration) loads onto total cost; and fee is your profit on top.
The ratio of the final billing rate to the starting direct rate is your wrap multiplier — the single number that tells you, and your competition, how lean your cost structure is. Modeling it before you respond keeps you from bidding work you can’t deliver profitably.
Price it, then win it
Pricing is one leg of a winning bid. Before you build a rate, confirm you can bid as small with the size standard checker and find the right opportunities under your NAICS code. When you’re ready to respond, GovCon helps you assemble a compliant, competitive proposal around your pricing.
Frequently asked questions
What is a wrap rate?+
A wrap rate (or loaded/burdened rate) is the billing rate you charge the government for an hour of labor, expressed as a multiple of the employee’s direct hourly pay. It "wraps" the direct labor with the indirect costs of doing business — fringe benefits, overhead, general & administrative (G&A) expense — plus fee/profit. A wrap rate of 2.0 means you bill twice the direct labor rate.
How is the wrap rate calculated?+
The common buildup is sequential: start with direct labor, add fringe (a percentage of direct labor), add overhead (a percentage of labor + fringe), add G&A (a percentage of total cost), then add fee/profit on the full cost. The billing rate divided by the direct labor rate is your wrap multiplier. Exact pools and allocation bases vary by company and accounting system.
What are typical indirect rates?+
They vary widely by company size, model and location, so there’s no single "right" number — a lean services firm looks very different from one carrying labs or facilities. Treat the defaults here as placeholders and replace them with your own provisional or actual indirect rates from your accounting system.
Why does my wrap rate matter when bidding?+
On labor-based federal work, your wrap rate largely determines whether you’re price-competitive. Too high and you lose on cost; too low and you can’t cover your indirect costs or make margin. Modeling it before you bid — and comparing it to the independent government estimate — is part of a disciplined pricing strategy.
Is this DCAA-compliant?+
This calculator is a planning tool, not an accounting system. DCAA compliance depends on how you actually accumulate and allocate costs across compliant indirect pools under FAR Part 31. Use this to model scenarios and sanity-check pricing, then rely on your accounting system and finance team for the rates you actually propose.
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