Glossary term
Wrap Rate
The multiplier applied to direct labor cost to produce a fully burdened billing rate.
The wrap rate combines fringe, overhead, G&A, and fee into a single multiplier on base salary. If a $50/hour salaried employee bills at $105/hour, the wrap rate is 2.1. Wrap rate is the central competitive variable on labor-based federal services work, which is why small firms with lean indirect structures can beat large primes on price.
Categories
- financial