Composite Fringe Benefit Rates
Composite Fringe Benefit Rates
Frequently Asked Questions
What are the benefits of using a composite fringe benefit rate cost allocation method?
- Provides a consistent charging methodology university-wide for employee fringe.
- Such cost allocation methodologies are commonplace and preferred by the federal government for reimbursement of costs related to sponsored research projects.
- Simplifies and improves the preparation and administration of budgets, including those associated with the grant proposal budget process.
- Limits the variability of certain types of fringe costs such as leave payouts.
When will the composite fringe benefit rate be effective?
The university will implement the use of a composite fringe benefit rate for the allocation of fringe benefits cost starting with pay period ending July 27, 2017. This payroll journal will post on August 1, 2017, and the related allocated fringe charges will post shortly thereafter.
What benefits are included in the composite fringe benefit rate?
The fringe benefits included in the composite rate are:
- Life Insurance
- Disability Insurance
- Workers compensation
- Termination Leave Payouts and related fringe
- Unemployment compensation
What leave payments will be included in the composite fringe benefit rate?
CFBR includes the payment of termination leave and payouts of annual and sick leave when an employee transfers from a 12-month appointment to a 9-month appointment (or vice versa). The regular use of annual and sick leave throughout employment is considered salaries expense, and it is not a fringe benefit.
What are the 2017-18 composite fringe benefit rates?
Faculty – 26%
COM Clinical Faculty– 19%
A&P – 32%
Executive Service – 24%
USPS – 43%
Post-Docs – 16%
OPS Non-Students – 8%
OPS Students – 2%
How often will these composite fringe benefit rates be adjusted?
The composite fringe benefit rates will be analyzed and updated annually prior to the beginning of the annual budget cycle and adjusted to reflect changes in the university’s actual benefit costs.
How will fringe benefits be recorded in my department or project?
Fringe benefits will be charged to your department or project via an allocation journal. The allocation of fringe benefits will occur biweekly, following the related payroll journal posting date. The allocation is an automated process that will charge fringe benefits depending on the account code where the employee’s salaries were recorded by applying the published rates to gross salary expense in the respective salary account codes.
All CFBR fringe charges will post to the general ledger account 711610 – Fringe benefit expense, except for Post Docs, OPS Non-Student and OPS Student fringe charges which will post to 712610 – Fringe benefit OPS expense. Refer to the General Ledger Mapping for further details.
How can I reconcile my fringe benefit charges to gross salary by employee group?
The allocation (ALO) journal ID naming convention indicates what employee group the fringe is related to. For instance, the fringe charges associated with faculty will have ALO journal ID of “CFRDFAXXX” for departments and “CFRPFAXXX for projects. Refer to the General Ledger Mapping for further details.
How often will the fringe benefit allocation occur?
Fringe benefits will be allocated to your department or project bi-weekly, following the related payroll journal posting date. The allocation will include payroll related fringe benefits, as well as any adjustments related to cost transfers.
How will the new rate structure affect existing awards at the time of the change?
The composite fringe benefit rate will be applied to all departments and projects, both new and existing, including any outstanding proposals. The new rates may impact both direct and indirect costs on your awards. The new fringe benefit rates will be included in cost activity beginning August 2017. Please work with Office of Research and Commercialization (ORC) to make budget modifications as necessary.
Will I need to calculate fringe benefit expense when processing salary cost transfers?
No, an automatic allocation of fringe benefit costs will be processed bi-weekly. The fringe allocation calculation will be based on all charges in the salary account codes, including the bi-weekly payroll journal, cost transfers, and any other adjustments. Fringe benefit charges will be calculated in accordance with the salary account code used to transfer the costs. Please refer to the following schedule for additional details: General Ledger Mapping.
What composite fringe benefit rate will be applied to payroll cost transfers?
The rate in effect at the time the payroll cost transfer is recorded to the general ledger will be applied.
What rate is used when an employee waives our medical benefits?
The composite fringe benefit rate will not vary depending on the employee’s individual elections. The fringe benefit rate applied will depend on the employee group the employee belongs to.
The CFBR rate is an average of all the benefits applicable to employees within rate groups based on attributes of the employees who fall into each group.
Why do the composite rates not distinguish between academic year and summer appointment faculty?
Composite fringe benefit rates are calculated using annual fiscal year-end data. Thus the reduced cost in fringe benefits for summer appointments is considered in the overall calculation of the rates.
Whom do I contact if I have questions not answered here?
Please contact firstname.lastname@example.org with any questions not addressed here.