# Cost-Plus Billing

> A pricing model where clients are billed for actual labor costs (tracked time × labor rates) plus a markup percentage or fixed fee to cover overhead and profit, requiring accurate time tracking and transparent cost documentation to justify billings and maintain client trust.

- **URL:** https://www.deltek.com/en/time-tracking/replicon
- **Category:** Time Tracking Practice
- **Tags:** Billing, Pricing, Government Contracting
- **Updated:** 2026-03-20 19:58
- **Canonical page:** https://timetrack.works/items/cost-plus-billing

## Details

## Overview

Cost-Plus Billing charges clients based on actual costs incurred plus an agreed-upon margin, making accurate time tracking essential for both billing and profitability.

## Common Structures

**Cost Plus Fixed Fee (CPFF)**:
- Reimburse all costs
- Add fixed dollar amount
- Example: Costs + $50,000

**Cost Plus Percentage (CPP)**:
- Reimburse all costs
- Add percentage markup
- Example: Costs × 1.15 (15% markup)

**Cost Plus Incentive Fee (CPIF)**:
- Base fee + performance bonus
- Rewards efficiency
- Common in government contracts

## Time Tracking Requirements

### Accuracy Essential
- Daily time entry
- Proper project allocation
- Contemporaneous documentation
- Audit trail maintenance

### Cost Justification
- Fully loaded rates documented
- Overhead calculations transparent
- Expenses properly allocated
- Regular reporting to client

## Pricing

N/A - This is a billing methodology.

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