It is the policy of Illinois State University, the “University”, that the Fringe Benefit Rate is established in accordance with the Federal Office of Management and Budget Uniform Guidance (OMB Uniform Guidance). The rate must be applied to salaries/wages for externally sponsored programs (funds not considered ‘exempt’ under 5 ILCS 375/11) when developing budgets or for charges of actual salary/wage costs.
The University has negotiated four fringe benefits that are grouped by employee classification.
- Tenure-Track Faculty
- Civil Service, Administrative Professionals, Non-Tenure Track Faculty
- Graduate Assistants, and Students
- Extra Help
The fringe rates are applied, to the applicable employee salary/wages, to represent the associated benefits for that classification of employee.
Procedures for Fringe Benefit Rate
i. Calculation of the Fringe Benefit Rate
Fringe Benefit Rate is calculated by the development of a pool of Fringe Benefit Costs (the numerator) and of a salary and wage base (denominator). The pool consists of costs for the benefits provided to employees. A Fringe Benefit Rate is developed by dividing the cost pool by the base; this rate represents the percentage that must be multiplied by employees’ salaries and wages expended for sponsored projects.
ii. Fixed Rate
The University establishes a fixed Fringe Benefit Rate based on accumulated cost calculations from the previous fiscal year. The fixed rate is based on an estimate of the costs for the period covered by the rate. When the actual costs for this period are determined, an adjustment will be made to the rate for the future year(s) to compensate for the difference between the costs used to establish the fixed rate and actual costs.
iii. Components of the Fringe Benefit Rate
The fringe benefit costs included in the negotiated rate are:
- Employment Taxes (Medicare and Old-Age, Survivor and Disability Insurance (OASDI)
- Health Plan
- Dental Plan
- Life Insurance
- Retirement Plan
iv. Application of the Fringe Benefit Rate
The Fringe Benefits are charged using the internally developed rates. The rate is applied to the portion of salaries and wages allocable to the sponsored project.