Fringe Benefit Rates

All salaries charged to grants and contracts will automatically generate an employee benefit charge. In order to calculate the dollar value of a University employee’s benefits, an employee’s salary is multiplied by a specific benefit percentage rate. These benefit rates vary according to type of employee. Benefit rates are calculated by the University and DHHS must approve the federal fringe benefit rate. The rates may change annually.

When the Office of Management and Budget revised its Federal Regulations, Cost Principles for Educational Institutions, it specified that certain fringe benefits could no longer be charged to federal awards. In response to this change, beginning FY00-01, the University began applying a lesser fringe benefit rate to federal awards than it applies to all other sources of funds – unrestricted, private, and endowment.

Federal Proposals

The University is required to use the current fringe benefit rates (below) as the provisional rates for future years until DHHS amends the rate. No increments may be added to the current fringe rate for future years’ budgets.

Nonfederal Proposals

The University Budget Office sets the nonfederal fringe benefit rate. It would be prudent to budget 0.1% increments each year after the latest year posted below for Level 1 and Level 2 employees.

The following fringe benefit rates will be in effect for the designated years:

Fringe Benefit Rates

  Actual
FY2016
Actual
FY2017
Actual
FY2018
Benefits-eligible employees (benefit levels 1 and 2), federal awards (Ledger 5) 26.8% 26.8% 23.2%
Benefits-eligible employees (benefit levels 1 and 2), all other 29.9% 29.8% 27.1%
Benefits-ineligible employees (benefit level 3) 8.4% 7.2% 7.3%

For more information on these rates, and to get the most comprehensive rate data please visit Financial Services website.