Inputs

Direct Labor Rate ($)

Employee base hourly wage before any burdens.

Fringe Rate (%)

Payroll taxes, benefits, PTO, 401(k) match. Typically 25–40%.

Overhead Rate (%)

Indirect costs tied to project execution — facilities, supervision, training. Typically 25–70%.

G&A Rate (%)

General & Administrative — executive, legal, accounting, BD. Typically 5–15%.

Fee / Profit (%)

Optional. Margin added to produce billable rate. Leave 0 to see loaded cost only.

Rate Structure

Cascading compounds each layer on the previous total (standard for most federal contractors). Additive applies each percentage to direct labor only.

Layer	Rate	Addition	Running Total
Direct Labor	—	$50.00	$50.00
Fringe	30.0%	+$15.00	$65.00
Overhead	40.0%	+$26.00	$91.00
Loaded Rate (G&A inclusive)	8.0%	+$7.28	$98.28

Loaded Rate

$98.28

Wrap Multiplier

1.97x

Effective Indirect

96.6%

Fee not included. Add fee if calculating billable rate.

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Setting up indirect rates that pass DCAA audit is different from calculating them.

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What is a wrap rate?

A wrap rate (also called loaded labor rate or fully-burdened rate) is the total hourly cost of an employee working on a federal contract — direct labor plus all the indirect costs layered on top.

Read the full guide: Wrap rates for federal contractors, explained.