Reduced EB Rate for Part-Time Employees, Visitors & Unregistered Students

August 7, 2007
Updated: June 6, 2008

What is Changing? Beginning FY2008 (July 1, 2007) the Employee Benefit (EB) rate for on and off campus part-time employees and visitors was changed to 8%, to cover the cost of the benefits these staff receive. Before FY2008, these employees were charged EB at full on and off campus rates.

Beginning FY2009, the reduced EB rate will be extended to undergraduate students, including UROPS, who are not registered but are employed by MIT. The 8% EB rate will be applied to undergraduate students working during the summer, effective June 23, 2008 -- the first pay week in FY2009.

Why the change? DCAA/ONR (our cognizant federal audit agencies) required us to establish an EB rate for non-benefits eligible employees and students that more accurately reflects the benefits cost of these employees.

Impact of the New EB Rate: The new EB rate affects only a small number of employees. However, this change applies to all employee payroll categories on Campus and at Lincoln. New payroll general ledger (GL) accounts have been created for reduced EB payroll charges.

This change does not impact eSDS or eDACCA.

Campus SAP Implementation:

• FY 2008: SAP Payroll charged the new reduced-EB Payroll GL accounts directly for non-exempt staff and visitors. For all exempt staff excluding visitors, a JV adjustment (trailing one month) had to be made to move appropriate salaries to the new reduced EB GL accounts.
• FY2009: Starting in July 2008, SAP Payroll will directly charge the reduced EB for unregistered undergraduate students employed by MIT. By January 1, 2009, SAP Payroll will charge the Reduced EB Payroll GL accounts for all staff directly, eliminating the need for JV adjustments.

In both FY2008 and FY2009, EB will be calculated and charged automatically in the General Ledger. A list of the new reduced-EB Payroll GL accounts can be found online.

Application of 8% part-time EB rate in Research Proposals and Awards: It is particularly important to assess whether an individual may receive additional employment and reach the 50% FTE or greater level at any time during the proposed duration of the award. If there is a possibility of going beyond the part time level, budgeting at the full time rate (24%) is recommended. COEUS is being updated to include the new GL codes which will automatically assess the part time rates. However, because of the similarity of GL accounts between full- and part-time rates, it is important to ensure that individuals are budgeted using the appropriate GL code. Regardless of what is budgeted in a proposal, the EB rate charged to the award will be determined based upon the implementation rules described below.

Implementation rules: Generally the “pension eligibility rules” are being used to determine which salaries receive the reduced EB rates. Specifically, the reduced EB rate will be applied when an exempt employee’s appointment is less than fifty percent time or a non-exempt employee’s regular weekly scheduled work hours are less than seventeen and one-half hours per week, or an employee’s job is not a fully eligible job for benefit purposes -- visitors or affiliate jobs.

If you have questions, please send email to payroll@mit.edu.