How are Fringe Benefits Calculated

Georgia State University (GSU) uses multiple fringe benefit rates developed under the requirements of Office of Management and Budget Circular A-21, Cost Principles for Educational Institutions (A-21). Starting July 1, 2011, GSU began using three separate fringe rates for different categories of employees. To arrive at these employee categories, a review was made of the fringe benefit eligibility for each class of GSU employees. Employees are grouped into three categories of fringe benefit eligibility, which are Full Time Employees (both Faculty and Staff), Part Time Employees (both Faculty and Staff), and Graduate Assistants (GRA/GTA). 

A fringe benefit rate for each employee category is calculated by the development of a pool of fringe benefits costs (the numerator) and of a salary and wage base (denominator). The pool consists of costs for the benefits provided to a particular category of employees. When the pool is divided by the base applicable to that category of employees, a rate results; this rate represents the percentage that must be added to employees’ salary and wage dollars.

The fringe benefit rate for each employee group will be reviewed annually to ensure an accurate allocation. Any over or under recovery of actual fringe benefit costs will be adjusted in the next rate calculation, which would go into effect for FY 2014.

Graduate students on academic appointment receive a waiver of some portion of their tuition costs. These costs are excluded from the fringe benefit rate calculation.