How do you calculate hourly rate for government contracts?

A Detailed Example

1. Federal Contractor Minimum Wage = $10.60 per hour.
2. Add Employer FICA and Medicare = $0.81 per hour.
3. Add Health and Welfare = $4.54* per hour.
4. Add Paid Leave = $0.41 per hour.
5. Determine the Indirect Expense Rate. Fringe Pool (unitized) = .81+4.54+.41 = $5.76. Fringe Base (unitized) = $10.60. Fringe Rate = a/b.

How is government Wrap rate calculated?

To calculate a wrap rate, divide the fully loaded rate by your base hourly labor rate. Typically, a competitive wrap rate will be somewhere between “1” and “2.”

How do you calculate a G&A rate?

G&A Rate= ((I * FBR) + E + F + (J *OHR)) / (G – ((I * FBR) + E + F + (J *OHR))) (Your Direct Labor Multiplier is your “loaded” cost per Direct Labor dollar.)

What is a normal G&A rate?

The survey requested general and administrative (G&A) rates from respondents; using the information they shared, we determined that G&A rates varied significantly, ranging from 5 to 30 percent. This is primarily attributable to the allocation base utilized in calculating the G&A rate.

What is the average wrap rate for government contracts?

By the way, the fee percentages in federal contracting are low compared to the commercial market – 8 to 10 \% fee is considered good.

What is the wrap rate?

What Is a Wrap Rate? A wrap rate is the factor you apply to a base hourly labor rate to arrive at a loaded labor rate (with or without fee). The fully-loaded labor rate includes fee and is the rate that you charge a customer for each hour of work.

What is a reasonable Wrap rate?

By the way, the fee percentages in federal contracting are low compared to the commercial market – 8 to 10 \% fee is considered good. Wrap rates include a percentage for overhead costs. Overhead costs include facilities expenses unless the work is at a government or client site.

Does Wrap rate include fee?

What is the most common base for calculating the general and administrative overhead rate?

The G&A rate allocation base most commonly used is Total Cost Input (all direct cost plus overhead).

What is the difference between Fringe overhead and G&A?

The difference between Overhead and G&A accounts depend on how your unique company structures G&A expense versus Overhead. General and Administrative, or G&A, expenses are those that benefit the organization as a whole. Overhead is caused by Direct Labor. One pool for all such expenses simplifies explanation.

What is total cost input base?

A total cost input base includes all costs of the business unit other than those included in the G&A expense pool (or the combined pool if the G&A expenses are combined with other indirect expenses).

What is a competitive Wrap rate?

The wrap rate is the total percentage of indirect costs that are multiplied to by base cost to determine a sale price. Contractor compete against each other, so having a low wrap rate is an advantage over your competitors. FYI -aggressive contractors try to get close to a 1.6 percent wrap rate.