June 11, 2009 
MEMORANDUM

Please use the following recommendations  when budgeting salary and fringe benefits for sponsored projects. This memorandum supersedes my previous memo on the same subject dated June 30, 2008 . Effective immediately, all proposal budgets for the 2009 - 2010 academic year and beyond should use the following fringe benefit information:

• Faculty and Staff fringes should be calculated using the Specific Identification (SI) method. Under SI, fringe costs are based on average actual costs and individual participation in retirement.  The following tools have been updated to help you budget with SI:
  • General description of SI including  frequently asked questions FAQs
  • Web tool to calculate multi-year, multi-person salary and SI fringe rates:  Salary Budget Builder
  • Excel worksheet with formulas (8 Yrs) that can be copied into your existing worksheets:  SI Excel Worksheet 
  • PDF Chart that shows the relationship between salary rate and the SI fringe rate: SI Fringe Chart 
  • Web tool that shows current salaries for employees in academic departments and their SI fringe rates: login to the CGA reference information: AIS Authorization to CGA Info  then select "Salary Search" from the menu.
• Academic-year faculty paid for summer school should be budgeted @ 7.65% of salaries.
• Part-time employees (< 50% appt or < 9 months) should be budgeted @ 7.65% of salaries
  • Please exercise caution when hiring a current MSU employee into a temporary position. MSU employee contracts differ on what qualifies as part-time and may involve bridging of past time worked that will make the current position/person benefit eligible, which then triggers full SI fringe charges. Also, part-time employees have been known to fill the remainder of their time with other MSU employment opportunities which again might make the employee benefit eligible and therefore full fringe. Questions should be addressed to Human Resources, but when in doubt, budget full SI fringe.
• Student labor should be budgeted at 0% of salaries paid during the academic year and 7.65% during the summer semester depending on the number of credits they are enrolled for.   If a student falls below a minimum number of credits set by the IRS, e.g., undergrads enrolled for less than 6 credits; master's level students enrolled for less than 5; and doctoral level students enrolled for less than 3 credits, then the account will be charged FICA and Medicare @ 7.65%.
• Graduate assistants fringe benefits (tuition, fees and health) will be proportionately charged to accounts each bi-weekly period. (see summary chart) *
  • Health - $927 per semester (Fall 2009 and Spring 2010 ) and $0 for Summer 2010 = $1,854 per year. 
    • The health amount should be increased by 5.5 % in each succeeding year.
  • Tuition and Fees - $3,762 per semester for Fall 2009   and Spring 2010 , and $1,914 for Summer 2010 = $9,438 per year.
    • These amounts should be increased by 6 % in each succeeding year.
• Graduate assistant salary ranges can be found at: HR Grad Assistant Salary Ranges

Salary rates for all employees should be inflated in the 1-3% range for each succeeding year. Please note that some federal agencies, including NIH, require special justification for annual salary increases in excess of 3% for multi-year proposals. Also, please note that even though NIH wants you to build budgets with your actual institutional base salary, if that salary exceeds the Executive Level I cap (currently $196,700 for AN appointments or $147,525 for AY appointments) NIH will adjust the award in accordance to this cap. Please see the following for more information about the NIH salary cap http://grants.nih.gov/grants/guide/notice-files/NOT-OD-09-069.html. For the most current salary cap amounts, please see http://grants1.nih.gov/grants/policy/salcap_summary.htm.

This Fringe and Salary Budget Guidelines document is available on our web site (www.cga.msu.edu). Please make this information available to all appropriate departmental faculty and staff. If you have any questions, please e-mail me at evon@cga.msu.edu or Craig ONeill at oneill@cga.msu.edu.

The contents of this memorandum are valid through 7/31/2010 unless amended. Click to see more SI information