Effective September 1, 1999, exempt salaries (academic and administrative appointments) paid from contract and grant awards will not be assessed payroll tax for 18/20 program costs. This change reduces the fringe benefit rate from 35.02% to 29.20%. All non-C&G accounts and cost share sub-accounts will continue to be charged fringe benefits at the rate of 35.02%.

In order to implement this change for September salaries (paid October 1) it was necessary to develop a strategy that did not require substantial change to existing payroll and labor systems. A more permanent solution may be worked out over the coming months. In the interim, a special set of object codes will be employed to effect the elimination of the charges to C&G exempt staff salaries. The set includes:

  2008   Academic salaries, C&G

            2428   Exempt staff overload, C&G

            2458   Exempt staff terminal pay, C&G

This will have the following effects:

• Existing and new appointments (PAF) and Payroll Accounting Distribution (PAD) documents will NOT need to be changed. The expense distribution of the payroll process will automatically change the 2000/2400 object codes to the corresponding value. Do not process new appointments (PAF) and distributions (PAD) using the new object codes.

• Sub-objects on C&G accounts for 2000, 2400, 2420, 2450 will need to be recreated in the FIS using the new corresponding objects of 2008, 2408, 2428, and 2458.

• Salary Transfer documents will utilize the new object codes when transferring costs. Automated edits will be added to the document to prevent errors.

• These new rates should be incorporated into proposals effective immediately. Existing award budgets will NOT be changed but will be charged the new lower rates.

• Cost sharing on proposals being submitted should continue to use the 35.02% rate while salaries charged directly to the project should be calculated at 29.20%.

Every attempt is being made to ensure necessary changes are in place for the monthly payroll, encumbrances, standard reports, decision support, and salary transfer documents. Nevertheless, your patience with any disruptions this implementation causes will be appreciated. 

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