Fringe Rate FAQs

The following components are included in the above fringe rates where applicable:

• Retirement: Includes employer contributions to the State Universities Retirement System (SURS).
• Health Insurance: Includes employer funded health insurance costs.
• Social Security (FICA): Includes employer portion of FICA tax.
• Medicare: Includes employer portion of Medicare Tax.

The use of a “fringe benefits pool” simplifies and improves the preparation and administration of extramurally submitted budgets and projects.

Budget Officers will see on payroll vouchers the employer share of an employee's fringe benefits (i.e. medical insurance, retirement, etc.) charged using institutionally approved rates.

There will be no changes for individual ISU employees. Individual employee share of selected benefits can change due to employee choices during open enrollment or as a result of a qualifying events. No employee changes will impact the amount charged to individual projects.

Beginning in FY27, the University will begin calculating internal fringe benefit rates annually, or as often as necessary, to accurately charge costs to individual projects. 

The pooled fringe rates were developed using institutional fiscal data collected in FY26. Final rates were reviewed by leaders in the Division of Finance and Planning and the Office of the Provost to ensure compliance with federal guidelines.

The appropriate fringe rate will be based on the employee classification for which salary/wages were earned.

The current pooled fringe rate agreement allows for four (4) pooled fringe rates.  The pooled fringe rates are defined as follows.

Fringe benefits will be charged to all sponsors that allow this cost. If a sponsor specifically disallows fringe costs, those expenses will be cost-shared by the department employing the employee.

No exceptions to these rules can be made

Changes to title will not affect an employee’s fringe rate. Employee changes that may affect an employee’s fringe rate would be a switch from one employee classification to another.  For example, a switch from faculty to staff (and vice versa). The easiest way to determine the appropriate fringe rate is by referencing the employee classification in the rate table.

Existing awards will be charged using fringe rates, not actuals.   Re-budgeting may be necessary in certain circumstances.  

Research and Sponsored Programs will be contacting and working with existing Budget Officers to rebudget projects that will be impacted by the change to fringe benefits.

Yes

The negotiated fringe benefit rates are applied to all employees who are eligible for benefits regardless of whether they accept the benefit and regardless of which benefits options they elect.

The negotiated pooled fringe rate will be charged automatically to the account and should be used for budgeting proposals as well.

Yes. Student employees receive fringe benefits and will be charged according to the negotiated pooled fringe rate.

Negotiated pooled fringe rates are applied based on the salary amount and rate group the employee falls into regardless of when the employee is costed to fund sources.

The benefit cost for an employee is the applicable rate multiplied by gross salary. If the costing allocation is lower, the salary is lower, and thus the benefit cost will be lower, even if the employee receives full benefits.

Inquiries and questions related to the transition to pooled fringe rates may be direct to Jason Wagoner, Senior Director of Research and Sponsored Programs, if any questions have not been fully addressed here.