For small services contractors pricing labor: turn a direct hourly rate into a fully burdened, fee-loaded rate layer by layer, see your wrap multiplier, and check it against typical bands. Or derive your indirect rates from annual pool dollars.
Start with the direct hourly rate. Add fringe on direct labor, then overhead, then G&A on total cost input, then fee on total cost. Divide the result by the direct rate to get the wrap multiplier.
Enter a year of pool dollars (actual or budgeted) and the tool computes the three-tier rates the way an indirect-rate schedule does: fringe on total labor, overhead on direct labor (+ fringe), G&A on total cost input. Exclude FAR 31.205 unallowables from every pool before you type them in.
| Step | Basis | Rate | $/hr |
|---|---|---|---|
| Direct labor | — | — | 50.00 |
| Fringeon DL | DL | 30% | 15.00 → 65.00 |
| Overheadon DL + fringe | DL + fringe | 20% | 13.00 → 78.00 |
| G&Aon total cost input | Total cost input | 10% | 7.80 → 85.80 |
| Feeon total cost | Total cost | 8% | 6.86 → 92.66 |
Wrap multiplier: 92.66 ÷ 50 = 1.85×
These rates are an example, not a target. Use your own pools.
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Get the email updates →Three-tier structure (fringe, overhead, G&A) is the standard; many contractors under about $10M revenue combine fringe and overhead into two tiers. Whatever you choose, the base for each pool has to be applied consistently, year after year, and match what you disclose to the government.
Wages for hours charged to a contract. The base everything else is stacked on.
Costs of employing people, allocated over labor dollars (direct and indirect).
Support for contract work that cannot be tied to one contract.
Running the company as a whole, allocated over total cost input.
The negotiated margin on top of cost. Not a pool; nothing is "in" it.
Expressly unallowable costs stay out of every pool billed to the government.
Rates are one input. A bid needs the whole buildup. The Bid Pricing Workbench stacks labor categories, hours, ODCs and fee into a priced proposal by contract type (FFP, T&M, CPFF) with the same math shown here.
Go further: Bid Pricing Workbench stacks labor categories, hours, ODCs and fee into a priced proposal and compares FFP, T&M and CPFF side by side ($699 once)