Office of Sponsored Programs - 300.07, Procedure 3 - Estimating Fringe Benefits

Title

Office of Sponsored Programs - 300.07, Procedure 3 - Estimating Fringe Benefits

Corresponding with:

• OSP Operating Standard 300.07 - Direct Cost, Personnel

Purpose

Fringe benefit rates are expenses directly related to employment. They are determined by an employee’s classification and applied as a percentage of the employee's proposed annual salary.

These rates serve as the baseline figures used to calculate fringe benefits. Social Security rates may vary for post-docs and graduate students depending upon the University’s operating standard and the type of award.

Procedure

I. Estimating Fringe Benefits - Non-Clinical Faculty and Licensed Physicians

• Determine the percentage rate for the applicable employee classification:
  • Multiply the proposed salary for the project times the appropriate percentage rate to calculate the number of fringe dollars: .19 x $21,000.00 = $3,990

II. Summer Salary Estimations

• The School of Medicine (SOM) provides guidelines for appropriate supplemental benefits:
  • For each qualifying individual, add 5.5% to the appropriate fringe (19%) based on percentage of effort: 5.5% + 19% = 24.5%
  • .20 x $115,000 = $23,000 proposed salary
  • $23,000 x 24.5 = $5,635 proposed fringe benefit

Once the proposed annual salary amount is calculated, apply the allowable escalation percent, which is generally set by the sponsor, to reflect inflationary and/or legislative increases in future years (commonly known as the Escalated Institutional Base Salary).

For example, if the annual projected salary of the project has been estimated at $13,320 for the first year and a 3% increase is anticipated each year, the salary calculations for a 5-year project would be calculated as follows:

• Year 1: $13,320
• Year 2: $13,320 x 1.03 =$13,719
• Year 3: $13, 719 x 1.03 =$14,131
• Year 4: $14,131 x 1.03 =$14,555
• Year 5: $14,555 x 1.03 =$14,992

Contact Information

For questions regarding this procedure and its related operating standard, please contact SponsoredPrograms@unc.edu.

For questions regarding Pre-Award management or Post-Award administration, please contact the assigned Sponsored Projects Specialist (SPS).

For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant.
OSP Staff assignments may be found in RAMSeS or on the OSP website.

History

The operating standards in the Office of Sponsored Programs Operating Standards & Procedures Manual supersede any OSP operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.