Contractor Contract Value Calculator
Estimate the total contract value for a contractor engagement by factoring in hourly rate, hours worked, overhead, profit margin, and reimbursable expenses.
Fill in the fields above and click Calculate.
Formula
Total Hours = Hours per Week × Contract Duration (weeks)
Base Labor Cost = Hourly Rate × Total Hours
Overhead Cost = Base Labor Cost × (Overhead Rate / 100)
Subtotal = Base Labor Cost + Overhead Cost
Profit Amount = Subtotal × (Profit Margin / 100)
Total Contract Value = Subtotal + Profit Amount + Reimbursable Expenses
Effective Billing Rate = Total Contract Value / Total Hours
Assumptions & References
- Overhead is applied to base labor cost only, not to expenses, which is standard practice in cost-plus contracting (FAR 31.2).
- Profit margin is applied to the combined labor + overhead subtotal, consistent with T&M and fixed-price contract structures.
- Reimbursable expenses (travel, materials, software) are passed through at cost with no markup unless otherwise negotiated.
- Typical contractor overhead rates range from 10%–30%; profit margins commonly fall between 5%–15% (AICPA, 2023).
- This calculator does not account for taxes, benefits, or self-employment tax obligations — consult a tax professional for net income projections.
- For government contracts, overhead and G&A rates must comply with FAR Part 31 cost principles.