A wrap rate (also called a loaded labor rate multiplier) is the factor applied to an employee's base salary or hourly rate to arrive at the fully burdened rate you bill the government. It accounts for fringe benefits (health, retirement, payroll taxes), overhead (facilities, indirect labor, equipment), G&A (corporate overhead, business development, accounting), and profit/fee. A wrap rate of 1.85 means you bill $185 for every $100 of base labor.
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Wrap Rate & Loaded Labor Rate Calculator
Enter your base hourly rate and indirect rate percentages to instantly calculate your fully loaded billable rate — with a complete cost-buildup breakdown.
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$
Direct labor cost — salary ÷ 1,880 annual hours is a common starting point.
%
FICA, health, retirement, PTO, workers comp. Typical range: 25–40%.
%
Applied to burdened labor (base + fringe). Covers facilities, equipment, indirect labor. Typical range: 25–80%.
%
Applied to total cost (base + fringe + OH). Covers executive salaries, BD, legal, accounting. Typical range: 8–20%.
%
Applied to total cost. CPFF typical: 6–10%. T&M/FFP typical: 10–15%.
Your Loaded Rate
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Fill in your base rate and indirect rate percentages on the left. Your full cost buildup will appear here.
Typical small company wrap rate1.5 – 1.9×
Typical mid-size company1.8 – 2.3×
Large defense contractor2.0 – 3.0×
On-site / OCONUS laborOften lower OH pool
How the Wrap Rate Formula Works
The wrap rate (also called a multiplier) is calculated by successively layering each indirect rate pool on top of the previous burden level. This matches the standard cost accounting methodology used by most government contractors and accepted under FAR Part 31.
Fringe Amount= Base Rate × Fringe%
Burdened Labor= Base + Fringe Amount
Overhead Amount= Burdened Labor × OH%
Burdened + OH= Burdened Labor + OH Amount
G&A Amount= (Burdened + OH) × G&A%
Total Cost= (Burdened + OH) + G&A Amount
Fee Amount= Total Cost × Fee%
Fully Loaded Rate= Total Cost + Fee Amount
Wrap Rate (multiplier)= Fully Loaded Rate ÷ Base Rate
Frequently Asked Questions
Wrap rates vary widely by company type and size. Small companies: 1.5 – 1.9. Mid-size companies: 1.8 – 2.3. Large companies with high overhead: 2.0 – 3.0+. Rates also vary by contract type — T&M and cost-plus contracts use all indirect pools, while FFP contracts price them in. Companies operating on-site at government facilities often have lower overhead rates ("facilities capital" pools don't apply).
Fringe (or fringe benefits) covers employee-specific costs: FICA, health insurance, retirement, PTO. These apply directly to each labor dollar. Overhead covers costs associated with running a business unit or project: facilities rent, utilities, project management support, equipment. G&A (General & Administrative) covers company-wide costs: executive salaries, accounting, legal, marketing, business development. These are allocated across all revenue. The order matters: fringe applies to base, overhead applies to (base + fringe), and G&A applies to (base + fringe + overhead).
Fee norms depend heavily on contract type. Cost-Plus Fixed Fee (CPFF): 6–10%. Time & Materials (T&M): 8–12% (built into ceiling rates). Fixed Price (FFP): 10–20%+ (risk-adjusted). The FAR includes fee limitations for certain contract types (e.g., 10% cap on CPFF for experimental/developmental work). Fee is typically negotiated and must be disclosed in proposals.
Many contractors split overhead into multiple pools — for example, "On-Site Overhead" (lower, applied to labor billed at government facilities) and "Off-Site Overhead" (higher, applied to work done at your office). This calculator uses a single blended overhead rate. For multi-pool calculations, run the tool separately for each pool, or use your DCAA-approved rate structure document as the source inputs.
Indirect rates on cost-type contracts are subject to DCAA audit and negotiation. Companies establish provisional billing rates at the start of each fiscal year, then reconcile to actuals via final indirect rate agreements. On FFP and T&M contracts, your rates are embedded in your ceiling prices and are typically not disclosed or subject to audit — but they must still be reasonable and not include unallowable costs under FAR Part 31.
SamSearch gives you access to awarded contract data including ceiling values, labor categories, and agency preferences. You can benchmark your rates and pipeline against actual awards in your NAICS codes, identify recompetes before the solicitation is released, and build your capture strategy around data rather than guesswork. Schedule a demo to see how our BD teams use SamSearch to stay ahead of their competition.