Fringe Benefit Rates for Fiscal Year 2024
We are pleased to announce that the University has made important progress toward bringing our fringe benefit rates down to a more competitive level and with greater clarity for budget planning purposes. This will mean that for regular faculty working on federal research grants, the effective rate will drop to about 31 percent, including FICA and Medicare, which is less than half that of last year’s proposed rate and on par with our Big Ten colleagues—and the rate is already locked in for the new fiscal year. As we will explain below and you can see on the chart, for now this decrease will apply only to Federal and Federal Pass-Through sponsored awards, but we are hopeful of making progress in future years on fringe rates for non-Federal awards.
On June 21st, the University was notified that Rutgers’ FY24 fringe benefit rates have been approved by the US government. University leadership has worked diligently with the State of New Jersey (SNJ) and our cognizant agency, the US Department of Health & Human Services Cost Allocation Services (DHHS-CAS), to agree on a rate process that would eliminate prior years’ challenges with receiving fringe benefit rates well into or after the fiscal year. The rates noted below are good for the entire fiscal year and will not change.
While the high cost of fringe benefits has made Rutgers’ sponsored award applications less competitive, the ongoing and concerted efforts by Rutgers officials, Rutgers faculty, and colleagues at other NJ research universities helped us continue to make the case for relief to the State Legislature and the Governor’s Office. As a result, the State of New Jersey allocated fringe relief funding through the State budget to offset the high cost of fringe benefits on Federal and Federal Pass-Through sponsored awards for FY 2024. This funding will bring Rutgers’ rates to a much more competitive position relative to our peers. This relief does not apply to non-Federal sponsored awards or to non-sponsored funding sources; as stated above, we are making additional efforts with the State to moderate the high cost of fringe charges in those cases, but, if approved, these will not be in effect before FY25.
Below are the final FY24 composite fringe benefit rates for Rutgers by funding source & employee type. This information is important for your FY24 planning purposes (e.g., for projections and contract proposals). These rates are now official and can be applied to current FY24 salaries and to proposals for grants and contracts. The FY24 Rutgers fringe rates are effective July 1, 2023, and we expect that the new rates will be updated in PeopleSoft with the 1st payroll run of FY 2024 on July 7, 2023. PLEASE NOTE: Fringe benefit cost accruals throughout the fiscal year will no longer be needed.
FY22 FY23 (proposed) FY24 (final)
Non-Federal Regular Salary Faculty & Staff
Non-Federal Post-Doc Associates
52.71% 60.75% 63.40%
Non-Federal Grad/Teaching Assistants
24.51% 30.42% 32.63%
Non-Federal House Staff
24.77% 30.59% 32.83%
Federal Regular Salary Faculty & Staff
54.09% 60.95% 23.47%
Federal Post-Doc Associates
52.71% 60.75% 26.93%
Federal Grad/Teaching Assistants
24.51% 30.42% 18.13%
Federal House Staff
24.77% 30.59% 17.76%
The composite fringe rates do not apply to additional compensation such as overtime, coadjunct assignments, bonuses, etc., and they do not include FICA/Medicare costs. To determine the total fringe benefit cost for the above employee types, 6.20% FICA and 1.45% Medicare should be added for planning purposes.
Please note that while the composite fringe rate applies only to base earnings of the employee types listed in the table above, FICA and Medicare apply to all earnings, including overtime, bonuses, extra compensation, additional assignments, etc., as well as to additional employee types such as lecturers and casual hourly workers. FICA applies to compensation up to $160,200 for calendar year 2023, and that limit is adjusted annually. Some employees, such as current Rutgers students working part-time incidental to their student status and certain foreign nationals, are exempt from FICA and Medicare.
Some employees, mostly part-time workers, receive neither health care nor pension benefits; the composite fringe rates may not apply to these costs. Accordingly, for employees enrolled in neither state health (medical, dental, prescription) nor state retirement plans, the total fringe benefit cost should be 6.20% for FICA and 1.45% for Medicare only, as applicable.
Of note, the FY23 full fringe benefit rate implementation remains delayed as the State of New Jersey has not had its rates approved by the US government. Although the FY23 proposed rates have been applied to non-Sponsored funding sources for FY23, the Rutgers full FY23 composite rates are still not approved and cannot be billed to sponsors. Further updates on the status of FY23 adjustments on sponsored projects will be provided later when we are notified that the SNJ FY23 rates are approved.
Questions concerning the application of fringe, FICA, and Medicare rates should be directed to your grant specialist in Research and Sponsored Programs (RSP) for pre-award matters, Research Financial Services for post-award matters at email@example.com, University Budget Office for budget matters at firstname.lastname@example.org, or the University Controller Cost Analysis Division at email@example.com.
J. Michael Gower Michael E. Zwick
Executive Vice President and Chief Financial Officer Senior Vice President for Research