Wrap Rate Calculator

A wrap rate is the fully burdened multiplier you apply to a base labor rate to capture the total cost of putting someone on a government contract. It rolls direct labor together with indirect costs — fringe benefits, overhead, and general and administrative (G&A) expenses — and, for a billable rate, profit or fee. A wrap of 1.9× means every $1 of base labor costs (or bills) $1.90 once everything is loaded on.

Wrap rates cascade multiplicatively — you do not simply add the percentages. Each rate applies to the accumulated cost beneath it: fringe applies to direct labor; overhead applies to labor + fringe; G&A applies to labor + fringe + overhead (the total cost input); and fee applies to that total cost. For example, a $50 base with 30% fringe, 20% overhead, 12% G&A and 8% fee is 50 × 1.30 × 1.20 × 1.12 = $87.36 cost, then × 1.08 = $94.35 billable — a 1.75× cost wrap and a 1.89× price wrap.

A cost wrap stops at fully burdened cost — base labor plus fringe, overhead, and G&A, with no profit. A price wrap adds fee or profit on top, giving your final billable rate. You bid the price wrap; you measure competitiveness and break-even against the cost wrap.

A competitive fully-loaded (price) wrap typically falls between about 1.6× and 2.2× base labor, but there is no universal 'good' number — it depends on your cost structure, contract type, and how lean the competition is. Service firms with low overhead can win at the low end; firms carrying more infrastructure sit higher. Use the calculator to see where your rates land, then compare against the work you actually bid.

Treat the result as an estimate using the standard cascading model. Your actual wrap depends on your company's DCAA-disclosed or approved indirect-rate structure and the bases you apply each pool to (some firms use a value-added G&A base, for instance). Use your approved rates for an actual bid, and confirm your accounting practice before pricing.