Fringe Benefit Costs in Proposal Budgets
Show estimated fringe benefit costs as separate budget lines or object codes in a cost reimbursement budget. The university establishes individual estimating rates for the six the categories of employee listed below. Once the salary amount is determined, fringe benefits are calculated as a percentage of the total salary for each individual or category of employee. These percentages are intended to provide adequate funding to cover the actual fringe benefit costs that will be charged to sponsors.
Estimating Rates by Category, Effective Fiscal Year 2016
|Employee Category||Rate||Estimating Rate Use Guidance|
|Faculty/Staff||33.0%||Use this rate for all permanent employees being directly charged to the project. Includes retirement contribution, federal taxes, mandatory health and other insurance benefits including Workers’ Compensation.|
|Post-Doctoral Associates||19.0%||Use this rate for Post-Docs being directly charged to the project. Includes, federal taxes, mandatory health and other insurance benefits including Workers’ Compensation.|
|Graduate Research Assistant - NON-EXEMPT||21.0%||Use this rate for a GRA who has not certified their exemption from federal tax withholding on their W-4 Form. Use this rate when you don’t know the student’s status; includes federal taxes, health and other insurance benefits including Workers’ Compensation.|
|Graduate Research Assistant - EXEMPT||16.0%||Use this rate ONLY for a GRA who has certified their exemption from federal tax withholding on their W-4. Use this rate when you know the student’s status; includes only health and other insurance benefits including Workers’ Compensation.|
|Temporary/Biweekly Payroll Employee - NON-EXEMPT||8.65%||Use this rate for students without appointments and other temporary hourly employees who have not certified their exemption from federal tax withholding on their W-4.|
|Temporary/Biweekly Payroll Employee - EXEMPT||1.0%||Use this rate for student employees working twenty hours per week or less, are enrolled full-time in classes and who have certified their exemption from federal tax withholding on their W-4.|
Note: Most sponsors will accept proposal budgets with fringe benefits estimated using this method. You may encounter a sponsor that requests more details to accept an estimate of fringe benefit costs. The rates shown here for temporary employees are the mandatory minimums. When a detailed breakdown of fringe benefit costs is required by a sponsor for faculty, post-docs or graduate assistants, consult the section “Detailed Fringe Benefit Components”
Explanation of Fringe Benefit Cost Components
Fringe benefits are allowable under applicable Cost Principles found in (2 CFR 200 Subpart E). NCSU pays the same components of fringe benefits for all employees. The variations are based upon the employee’s category, selected retirement plan and Federal tax exemption status. The Government has agreed to allow NCSU to use a simplified method for estimating fringe benefit costs in proposal budgets to ensure that sufficient funds are budgeted. This simplified method uses a single percentage rate for each category of employee. The Government approves our use of this simplified method, but the university establishes the estimating percentage rates based the relative impact these costs have on an average salary in each category.
NCSU does not invoice sponsors based upon these estimating rates. NCSU does not charge sponsors based upon a comprehensive pre-negotiated fringe benefit rate agreement. The NCSU payroll system calculates the exact salary and fringe benefits paid for every employee per pay period. NCSU then invoices project sponsors based upon these actual costs incurred.
The fringe benefit costs fall into one of the following four categories, each regulated by a Federal or state agency.
- Retirement Plan Contributions based upon percentage rates set by the State of NC.
- Federal Taxes are withheld and remitted to the IRS: *
- “Old Age, Survivors and Disability Insurance” (OASDI or Social Security).
- “Federal Insurance Contributions Act” (FICA or Medicare and Medicaid).
- Insurance Cost(s) For:
- Faculty and staff include health insurance, death benefits, long term disability income. These rates are set or negotiated by the State of NC for all state employees.
- Post-doctoral associates includes mandatory health insurance; rates negotiated by NCSU.
- Graduate student assistants includes health care coverage, normally under the Student Health Plan.
- Fixed Benefit Composite Rate. ** This component (typically between 0.7% and 1.5%), is collected monthly from every university payroll account regardless of source. Contributions pay required expenses not attributable to a single project or department, such as Worker’s Compensation. The Government adjusts this component annually, based on actual costs from the previous year.
* Federal taxes are mandatory for all employees, including temporary employees unless they have certified themselves exempt on their “Employee’s Withholding Allowance Certificate” (IRS Form W-4).
** Fixed Benefit Composite Rate fringe benefit charge is mandatory for all payroll accounts regardless of funding source or employee classification.
For specific guidance on this matter call SPARCS at 515.2444 or email firstname.lastname@example.org.