Employee Benefits Rate

LAST UPDATED: May 30, 2018

What You Should Know

The employee benefits rate is a set percentage applied to non-student salaries. It includes the costs Princeton incurs on behalf of its employees and their dependents for:

  • retirement plan benefits
  • the University’s share of FICA taxes
  • medical insurance
  • life insurance
  • long-term disability insurance
  • workers' compensation
  • unemployment insurance
  • occupational medicine services provided through University Health Services
  • staff educational assistance
  • subsidized employee cafeterias
  • childcare subsidies
  • mass transit subsidies

The rate charged in academic departments also includes faculty sabbatical leaves and short-term disability.

Three Different Rates

We have three employee benefits rates: one for academic departments and programs; one for administrative departments; and one for the Princeton Plasma Physics Laboratory (see the main campus rate agreement.)

Rate Calculation & Application

The rate is the ratio of total plan costs divided by the total salaries and wages paid to non-student employees. It is applied to every non-student salary dollar processed through the Labor Accounting system: account codes prior to July 1, 2014, 201-207, 210, 301-307, and 501-503; on and after July 1, 2014, 5003-5005, 5051-5053, 5093, 5101, 5151-5155, 5181-5184, and 5301-5303. Student salary account codes exempt from the benefits rate charge: prior to July 1, 2014, 208 and 209; on and after July 1, 2014, 5201-5206 and 5251-5252.   Labor Accounting calculates the benefit charge based on staff class and department.

The two main campus billing rates are based on projected costs. Any over- or under-recovery is carried forward and built into future rates. The separate PPPL benefits rate is estimated in advance and adjusted to recover actual costs each fiscal year. The tables below apply only to the main campus rates.

FY 2018 Employee Benefit Rates
Major Components (Expense/Salary) Rate
Medical Expenses 11.1
Employer Retirement Contribution 9.5
FICA Taxes 6.2
Other 1.3
Total Administrative Department Rate (Base) 28.2
Faculty Sabbaticals 8.9
Total Academic Department Rate 37.1

Projected Rates

The below FY2019, FY2020, and FY2021 rates are provided for internal University planning purposes only and have not been approved by the federal government. The ORPA website shows the benefit rates that are approved for use in preparing budgets for federally sponsored awards.

Projected Future Benefit Rates (as of July 2017)
Fiscal Year Administrative Rate Academic Rate
2019 29.8 37.4
2020 30.2 38.7
2021 30.5 39.0

Historical Benefit Billing Rates

Historical Main Campus Employee Benefit Billing Rates
Fiscal Year Administrative Rate Academic Rate
2018 28.2 37.1
2017 28.2 33.3
2016 29.2 34.8
2015 28.2 34.2
2014 27.9 33.7
2013 27.5 34.2
2012 28.9 35.5
2011 28.2 34.5
2010 27.7 34.3
2009 27.6 34.0
2008 26.2 32.5
2007 26.1 33.0
2006 27.4 33.2
2005 26.7 32.0
2004 26.9 33.1
2003 25.8 32.3
2002 25.6 31.2
2001 25.6 31.7
2000 26.8 33.9

Casual Hourly Employees & the Benefits Rate

Although casual hourly employees don’t participate in all Princeton benefit programs, they generate benefits costs. The largest is the University’s share of FICA tax. Hourly employees also are covered by our workers’ compensation policy and have access to subsidized cafeterias. In some cases, state and federal law requires that we extend temporary disability and medical coverage to these employees. These costs make up approximately seven and a half points of the total benefits rate.



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