Staff Benefits

Determining staff benefits on a real cost basis

A Benefits Table developed by Federal Financial Operations will assist you in determining appropriate staff benefits to be included in sponsored proposals. It shows for various salary categories the maximum level of staff benefits chargeable to sponsored accounts. It is updated each January.

Staff benefits are charged to sponsored project accounts on a real cost basis. In 2008 for example, a laboratory technician with an annual salary of $40,000, enrolled in the family plan for major medical and dental benefits, will incur annual staff benefit costs to a sponsored project of $20,226 (or 50.6% of the salary base), whereas a Research Scientist, with an annual salary of $70,000 (enrolled in the family plan), will incur annual staff benefit costs to a project of $26,121 (or 37.3% of the salary base).

Several staff benefits--such as major medical and dental plans--are fixed costs, which do not increase as the level of salary increases. Prescription drug benefit costs are now included in the medical insurance costs.

On the table, the annual amounts shown are based on family plans. The annual charges for a single individual are lower and adjustments can be made in the totals for the appropriate salary category.

2008 Individual Charges

major medical: $4,583

dental coverage: $233

Medicare and Social Security charges
Other benefits vary as a percentage of the salary paid to the individual employee. Sponsored projects will be charged for each employee salary a percentage for Medicare and Social Security. In 2008, the rate is 1.45% for Medicare. For Social Security (FICA) payments, 6.2% of the employee's salary is charged up to the year's threshold of $102,000. That means for the first $102,000 of an employee's salary, the equivalent of 7.65% percent is charged for these benefits, with 1.45% charged on an individual's salary beyond the $102,000 threshold.

Determining costs using Benefit Estimators

It may not be possible to determine in the proposal stage the actual configuration of staff benefits for a particular research project. Therefore, an estimator often is used, based on an average percentage of salaries committed to the project. However, if the mix of salaries for faculty and staff is distributed over a broad range (e.g., from $20,000 to $180,000), it may be appropriate to use several estimators to ensure that adequate funds for staff benefits are provided in the proposal budget.

Benefits percentages vary widely--from 23.8% for salaries of $180,000 to 80% for salaries of $20,000. One estimator often used in the past, 30%, had been the midpoint in previous ranges. Units are encouraged to examine recent benefits expenditures to determine if a different estimator or several estimators should be used.

GSRA Costs

GSRA stipends should not be included in the salary totals to which a percentage estimator is applied. Doing so will result in far fewer dollars being included in budgets for such benefit payments than will be required to cover actual costs. Guidelines for determining benefits for GSRA appointments are included in GSRA Cost Estimates.

Last reviewed: 1/28/2008