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Government Costing

Fringe Benefit Rates

Fringe benefits include employer contributions for social security, employee insurance, workers compensation, etc. The Universities calculate fringe benefit rates which are then charged to sponsored project agreements so that each project (federal and non-federal) pays its fair share of these support costs. Our sponsors recognise the importance of these costs and will reimburse us for fringe benefit costs, expressed as a percentage of total salaries.  Separate fringe benefits rates are calculated for each of our three Universities.

The Universities fringe benefit rates consist of multiple rate components as follows:

  •          Employee health, life, and dental;
  •          Graduate assistant health, dental, and vision;
  •          Termination vacation and sick;
  •          Workers compensation;
  •          Retirement;
  •          OASDI;
  •          Overseas worker’s compensation

The Universities follow federal guidelines from the Code of Federal Regulations (Uniform Guidance Title II CFR 200) on allowability and proper treatment of these costs. These guidelines are also referred to as "Uniform Guidance".

Fringe Benefit rates are based on a specified fiscal year’s actual historical expenditures and are calculated annually by various university offices: University Government Costing, University Accounting & Financial Reporting (UAFR), Risk Management, and other units.

Once the fringe benefits rate calculations and related reconciliations are performed, University Government Costing is responsible for preparation and submission of the fringe benefit proposal packages, university communications, audit support, and final rate negotiations.

A fringe benefit proposal package is submitted to our cognizant federal agency, the Office of Naval Research (ONR) for negotiation and approval. In addition, ONR contracts with the Defense Contract Audit Agency (DCAA) to perform audits of the rate proposals.

Fringe benefit rates change at the beginning of each fiscal year, and the rates are fixed with carry-forward. In addition, the rates must be submitted as provisional until DCAA completes the audit and final approval is obtained from ONR after which time final rates are granted. Some of the rate calculations must be performed as late as July to be based on an entire fiscal year's expenditures. As a result, proposal submission generally occurs in August. The DCAA audit of the proposal and ONR final approval takes many months, and final approval can be as late as June of the next year, therefore accuracy is critical.

 Last Updated: June 15, 2018

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