UW Research

Policies, Procedures and Guidance

GIM 03 – Fringe Benefit Rates and Sponsored Projects

Effective: April 25, 2013

Purpose

This policy outlines the fringe benefits rates to be used when preparing budgets for sponsored project proposals.

Background

Fringe benefit rates cover expenses such as Worker’s Compensation, Unemployment Compensation, Health Plans, Retirement Plan, Social Security, Medicare, and Separation Leave for University employees.

Each year, using methods set out in approved Cost Accounting Standards, Financial Accounting and Management Accounting and Analysis (MAA) use estimated costs to calculate the rates for charging fringe benefits to budgets for the next fiscal year. New rates are then proposed to the Department of Health and Human Services, Division of Cost Allocation, for approval. These rates are known as the preliminary fringe benefit rates. The approved rates are effective July 1 of each year.

Persons/Offices Affected

Department staff who prepare sponsored project proposals to outside sponsors, and faculty and staff paid under the sponsored project budgets.

University Policy

Fringe benefit rates associated with an employee’s effort and salary on a sponsored project are to be included in proposed sponsored project budgets, consistent with OMB Circular A-21 and specific sponsor policies. All sponsored project proposal budgets should include funding for employee benefits at rates commensurate with the salary object code of the individuals participating on the project, as set out in the fringe benefit rate table.

Publication of the preliminary fringe benefit rates is for use in multi-year proposal budgets. It is recommended that preliminary rates be used to calculate anticipated fringe benefit costs in the fiscal year(s) beyond the current fiscal year for which the University has approved rates.

Actual fringe benefit rates charged to a sponsored project will reflect the current approved rates for that fiscal year.

Procedures and Guidance

Separation Leave

The separation leave load rate covers the costs for separation leave for benefit eligible classified, professional staff, and librarians. The increase in the fringe benefit rates charged to individual budgets will be offset by the elimination of separation leave salary assessments to those same budgets. This change will eliminate large, unanticipated separation leave payouts, which is especially challenging when assessed to budgets with fixed periods and sponsored project budget.

Responsibilities

Academic Unit eGC1 reviewers:

Review sponsored project budget for consistency with local policies and this GIM.

Office of Sponsored Programs:

  • Review sponsored project budget presented in eGC1 and proposal for consistency with each other and for correct application of fringe benefit rates as set out in this GIM.
  • Communication with Sponsor as needed for clarification of effective date of rates and application of rates.

Principal Investigator or his/her delegate:

Prepare sponsored project budget consistent with OMB Circular A-21 and this policy with respect to University employee costs.

Definitions

Preliminary Rates:
Calculated rates based on estimated costs for charging fringe benefit costs to budgets during the upcoming fiscal year. These are the rates that have been (or will be) submitted to the Department of Health and Human Services, Division of Cost Allocation for approval.
Separation Leave:
Qualifying payments made to benefits eligible employees for accumulated annual leave at the time of separation from the University of Washington and accumulated sick leave at time of retirement or death.
Sponsored Project:
Any exchange transaction between the University and the sponsor. A University sponsored project is not a purchase or sale of goods or services or “work for hire” arrangement but instead is a mutual exchange involving the University and a sponsor. Sponsors may provide funding, equipment or other tangible items, such as goods or services, for research, training, education programs, analytical services or other rights or goods.

Other Related Resources

Subject Document
Cost Principles for Educational Institutions OMB Circular A-21
Payroll Load Rates Financial Accounting Payroll Load Rate Explanation

Contacts

Subject Contact Email Phone
Sponsored Projects and applicability of fringe benefit rates OSP osp@uw.edu 206-543-4043
Preliminary rates and negotiation of rates Management Accounting and Analysis (MAA) 206-543-8282
Financial Accounting accountg@uw.edu 206-221-7845