Routing

Rather than masquerade, your wireguard server can forward traffic with the VPN addresses intact. You must handle that on your network in one of the following ways.

Symmetric Routing

Classically, you’d treat the wireguard server like any other router. You’d create a management interface and/or a routing interface and advertise routes appropriately.

On a small network, you would simply overlay an additional IP range on top of the existing on by adding a second IP address on your router and put your wireguard server on that network. Your local servers will see the VPN addressed clients and send traffic to the router that will pass it to the wireguard server.

Asymmetric Routing

In a small network you might have the central peer on the same network as the other servers. In this case, it will be acting like a router and forwarding traffic, but the other servers won’t know about it and so will send replies back to their default gateway.

To remedy this, add a static route at the gateway for the VPN range that sends traffic back to the central peer. Asymmetry is generally frowned upon, but it gets the job done with one less hop.

Host Static Routing

You can also configure the servers in question with a static route for VPN traffic so they know to send it directly back to the Wireguard server. This is fastest but you have to visit every host. Though you can use DHCP to distribute this route in some cases.