A fringe benefit rate will simplify the monitoring of fringe benefit charges to accounts and simplify salary re-assignments.
With direct charge method, some fringe benefits are paid centrally while pooled rates allow for centrally funded fringes to be included in the fringe rate to more accurately allocate total fringe costs.
Reduced Risk of Non-compliance
Fringe benefit rates are negotiated annually with the institution’s cognizant federal agency.
A fringe benefit rate will result in consistency between budgeting and expense practices; and simplify negotiations with sponsors.
A department can easily calculate the total cost of a new employee at the time of hire rather than after new employees make benefit choices.