Government Contract Labor Rates: GSA Schedule, SCA, and Fully Burdened Rate Guide (2026)

The Short Answer

Government contract labor rates are the fully burdened hourly or annual costs that contractors charge the federal government for each labor category. A fully burdened rate includes base salary, fringe benefits, overhead, general and administrative (G&A) expenses, and profit. In 2026, typical fully burdened rates for IT services range from $85/hour (junior help desk) to $340/hour (senior cybersecurity SME), with wrap rates of 1.85x to 2.45x base salary depending on the contractor's cost structure.

How GSA Schedule Labor Categories Work

The GSA Multiple Award Schedule (MAS) is the government's largest contract vehicle, with $52B in FY2025 sales. Labor rates on GSA Schedules follow a specific structure:

SIN-Based Organization

Labor categories are organized by Special Item Number (SIN). Common SINs for professional services:

How GSA Rates Are Set

When you apply for a GSA Schedule, you propose labor rates based on your commercial pricing. GSA negotiates from there:

GSA vs Open Market Pricing

SCA Wage Determinations

The Service Contract Act (SCA) sets minimum wages and fringe benefits for service workers on federal contracts. If your contract is SCA-covered:

Finding the Right Wage Determination

How to Calculate Fully Burdened Labor Rates

The formula for a fully burdened rate:

Fully Burdened Rate = Base Salary x (1 + Fringe%) x (1 + Overhead%) x (1 + G&A%) x (1 + Profit%)

Example: Mid-Level Systems Engineer in DC Metro

Wrap rate: 2.20x base salary ($145.98 / $66.49)

Rate Component Definitions

Typical Wrap Rates by Industry

Overhead, G&A, and Profit Rate Benchmarks

Based on DCAA audit data and industry surveys:

These benchmarks shift by company size. Large contractors ($500M+ revenue) tend to have lower overhead percentages due to scale but higher G&A due to corporate complexity. Small businesses ($5-50M) often have higher overhead but lower G&A.

How DCAA Audits Rates

The Defense Contract Audit Agency (DCAA) audits contractor indirect rate structures and proposed pricing. Here is what they review:

Incurred Cost Audits

Annual audits of your actual indirect rates vs. your provisional billing rates. DCAA examines:

Forward Pricing Rate Audits

When you propose rates on a new contract, DCAA may audit your forward pricing rate proposal:

Avoiding DCAA Red Flags

Labor Category Examples with Rate Ranges (2026)

These rates reflect 2026 market conditions. DC metro rates run 15-25% above national averages; OCONUS rates vary significantly by location. Use Fed-Spend to pull location-specific pricing benchmarks from actual FPDS award data.

FAQ

How do I find a competitor's labor rates on their GSA Schedule?

Go to GSA eLibrary (gsaelibrary.gsa.gov), search by contractor name or SIN, and download their price list. GSA Schedule rates are public information. Compare their published ceiling rates to historical task order awards (available through FPDS or Fed-Spend) to estimate their actual billing rates, which are typically 5-15% below ceiling.

What is a good wrap rate for a small business government contractor?

For a small business ($5-50M revenue) performing IT or professional services in the DC metro area, a wrap rate of 2.00-2.25x is competitive. Below 2.0x is aggressive and may indicate thin margins or understated indirect costs. Above 2.3x puts you at a disadvantage in LPTA competitions and makes it harder to win price-sensitive task orders. Focus on keeping overhead below 35% and G&A below 15%.

Do GSA Schedule rates include profit?

Yes. GSA Schedule rates are fully loaded -- they include base salary, fringe, overhead, G&A, and profit. When you negotiate your GSA Schedule, you propose rates that already incorporate your full cost structure and desired margin. The government does not separately negotiate profit on GSA Schedule orders unless the task order exceeds $25M and is cost-reimbursement.

Research labor rate benchmarks by NAICS →

Compare contractor pricing on GSA Schedules →