Fringe Benefit Rates - FAQ

The initial fringe rate components will include the following benefits: FICA (social security), unemployment, workers’ compensation, health insurance and the retiree health surcharge, retirement, terminal leave payout, and employee assistance.

This is part of an overall budget redesign; this should make budgeting simpler, more straight-forward, less subject to interpretation and manipulation, and with less potential for decision making based on individual circumstances.

July 1, 2019 is the expected implementation date for all campus. If the DHHS negotiated rates are not negotiated in time for the July 1st implementation date, the University plans to use the proposed fringe rates for all accounts and adjust rates as necessary when final negotiations are completed.

Rates were calculated by costing experts in Sponsored Programs Accounting and Compliance, and reviewed by leaders in the Division of Research, Division of Administration and Finance, and the Office of the Provost. Calculations were done using prior year data on benefit expenses and projections for future expenditures.

Our fringe rates are negotiated with the US Department of Health and Human Services (DHHS), as they are the cognizant funding agency for the University.

The appropriate fringe rate is determined by the wage object code. Please see the Fringe Rates (link to /rates) page for more information.

Fringe rates apply to wages in all accounts, regardless of fund source.

No exceptions to these rules can be made. Any relief sought due to potential costs related to these rules will be treated as a funding issue for which financial support may be offered, rather than a change to the rules or the granting of an exemption.

Budgeting using fringe rates will be actually be simpler. Individual’s circumstances do not drive a change in the cost that is charged to the department, because rates are set by categories of employees, not individuals and not individual circumstances.

No, there is no change to the underlying benefits or cost to the employee.

All salary budgets will have a fringe cost associated with them using the same category-based fringe rates.

Changes to title will not affect an employees fringe rate. Employee changes that may affect an employees fringe rate would be a switch from a contractual position to a regular position (and vice versa), or a switch from faculty to staff (and vice versa). The easiest way to determine the appropriate fringe rate is by referencing the wage object codes in the rate table.

Existing awards will be charged using fringe rates, not actuals. If the sponsor allows for rebudgeting, the PI may pursue that option to account for cost changes. In restricted non-state support accounts, deficits created by fringe benefit expenditures exceeding budgets in externally funded sponsored awards are absorbed by the project where possible, otherwise, funded by the unrestricted funds.

Yes, that is the intent and benefit of this change. Please see “What is the date of implementation?”, above, for additional details.