Comptroller Fiscal Year Memo Letter Head

To:                  Chief Fiscal Officers

From:              Martin J. Benison, Comptroller

Date:               June 26, 2014

Subject:           Approved FY2015 Fringe Benefit and Payroll Tax Rates

Comptroller Memo FY2015-02


Executive Summary

The purpose of this memo is to notify departments of the approved fringe benefit and payroll tax rates for FY2015.  The U.S. Department of Health and Human Services has approved the fringe rate of 27.27% and a payroll tax rate of 1.59%. 

 


Comptroller Memo FY2015-01, dated February, 3, 2014, advised departments that a fringe benefit rate of 27.27% and a payroll tax rate of 1.59% had been submitted to the U.S. Department of Health and Human Services for approval.  The early notice was to assist departments in planning for FY2015.  The U.S. Department of Health and Human Services has approved the fringe rate of 27.27% and a payroll tax rate of 1.59%.

These rates have been calculated with the concurrence of the Secretary of the Executive Office of Administration and Finance and the U. S. Department of Health and Human Services.  Please see Administrative Bulletin ANF #5.

The following components comprise the approved FY2015 fringe benefit rate:           

Group Insurance

15.96%

Retirement

  10.39%

Terminal Leave

  0.92%

Total

27.27%

This rate is applicable for both the state “5D” rate used to assess fringe benefit costs on all state funds, other than the General Fund, pursuant to M.G.L. Chapter 29, § 5D, and the “6B” rate used to assess fringe benefit costs on federally supported programs pursuant to M.G.L. Chapter 29, §6B.  The rate is applied to salaries expended under object codes A01, A07, A09 and AA1 to determine these particular fringe benefit costs.

Because the costs of terminal leave salaries are allocated through the fringe benefit rate, A12, Sick-Leave Buy Back; A13, Vacation-in-Lieu; and A21, Payments for Deceased Employees object code expenditures may not also be claimed as direct costs on federally supported programs whether incurred on Federal grants, contracts or state appropriations subject to Federal reimbursement. 

The following components comprise the approved FY2015 payroll tax rate:

Unemployment0.26%
Universal Health0.08%
Medicare Tax1.25%
Total1.59%

This rate is applicable to all account types pursuant to M.G.L. Chapter 151A, sections 14C and 14G for unemployment and universal health insurance, respectively, and M.G.L. Chapter 7A, sections 3, 7 and 8 for Medicare insurance.  The rate is applied to regular and contract employees and is assessed to all AA and CC object codes with the exception of A75, A90, CC5, C33, C75, C90, and C98.

All fringe benefit and payroll tax assessments determined by these rates will be charged to object code D09 at the close of each accounting period.

Please note that certain expenditures made under Interdepartmental Service Agreements (ISAs) may trigger the assessment of fringe benefit and payroll tax costs to the ISA child account and both the Buyer and Seller Departments are responsible for ensuring that these amounts are adequately funded in the ISA and identified in the ISA budget.

Questions regarding this memo’s rates may be directed to Taneka Simmons at (617) 973-2606.

Enc.        FY2015 Fringe Agreement doc format of FY15-02 fringe agreement
                

               Rate Summary xls format of FY15-02 fringe rates
               

cc:           MMARS Liaisons

                Payroll Directors

                General Counsels

                Internal Distribution