Fringe Benefit Rates for Fiscal Year 2025

On June 27, 2024, Rutgers was notified that its FY25 (Fiscal Year 2025) fringe benefit rates have been approved by the U.S. government. University leadership worked with the State of New Jersey and our cognizant agency, the U.S. Department of Health and Human Services’ Cost Allocation Services to agree on a rate process that will be in effect throughout this fiscal year, beginning July 1, 2024.

While the high cost of fringe benefits historically has limited the competitiveness of Rutgers-sponsored award applications, persistent efforts by Rutgers leaders, faculty, and staff, and by colleagues at other research universities in the state have been made to the State Legislature and the New Jersey Office of the Governor. As a result, the State of New Jersey will continue to allocate fringe relief funding through the State budget to offset the high cost of fringe benefits on Federal and Federal Pass-Through sponsored awards in FY25. This funding enables Rutgers’ rates to be more competitive relative to peers. This relief does not apply to nonfederal sponsored awards or to non-sponsored funding sources; there are efforts underway with the State to moderate the high cost of fringe charges in these circumstances that, if successful, could take effect in a future fiscal year.

Below are the final FY25 composite fringe benefit rates that should be used for FY25 planning purposes (e.g., for projections and contract proposals) and applied to current salaries and proposals for grants and contracts. These rates were updated in the PeopleSoft system for the first payroll distribution of FY25 on Friday, July 5, 2024, and they are posted on the University Finance and Administration website.

Please note:

• Lecturer fringe rates will be applied manually until the implementation of the new Human Capital Management (HCM) system in 2025. 

• Fringe benefit cost accruals will not be needed, since the above rates are final for FY25.

• The composite fringe rates do not apply to additional compensation such as overtime, coadjutant 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.  

  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 part- time lecturers and casual hourly workers. FICA applies to compensation up to $168,600 for the 2024 calendar year, 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.  

For questions concerning the application of fringe, FICA, and Medicare rates, please refer to the following list of contacts:

• Pre-award: Contact your grant specialist in Research and Sponsored Programs

• Post-award: Email Research Financial Services at financialservices@rutgers.edu

• Budget: Consult the University Budget Office at budget@finance.rutgers.edu

• Other: Contact the Cost Analysis and Capital Equipment Management team within the Office of the University Controller at cost@finance.rutgers.edu. 

J. Michael Gower                                                                                           

Executive Vice President and Chief Financial Officer                      

University Treasurer