A new endowed benefit rate will be implemented in the Kuali Financial System (KFS) on November 1, 2025. The 37% rate for FY26 and FY27 is retroactive to July 1, 2025.
Accounts Affected
The new rate will apply to all endowed account types EN, TC, JI. The Labor Benefit Rate Category Code for these accounts will remain as EN and be charged the 37% rate.
Exceptions: Accounts in fund CG or sub-fund APFEDL.
The Labor Benefit Rate Category Code for these excepted accounts will be changed to EG. These excepted accounts will remain at 35% for Fiscal Year 2026 and increase to 35.5% in Fiscal Year 2027.
Timeline and Impacts
The following information is subject to change.
Before November 1, 2025
ACTION REQUIRED: Initiate and fully approve salary transfers from July 1, 2025 – October 31, 2025, using the Salary Expense Transfer e-doc, to avoid potential manual adjustments.
On November 1, 2025
ACTION REQUIRED: Avoid initiating salary transfers between November 1 and November 10.
- The Labor Benefit Rate Category Code for the excepted accounts will change to EG. This will be done centrally.
- The full (MX) benefit rate on other endowed accounts will increase to 37%.
- All payrolls and salary transfers processed as of this date will be calculated at the new rates.
On November 3, 2025
Corrections of payrolls for July through October will begin, taking at least several days to complete.
On November 10, 2025
Corrections of benefit encumbrances will begin. The corrected benefit encumbrances should appear after the 11/15 (exempt) and 11/20 (non-exempt) payrolls have been run.
On November 24, 2025
Any remaining issues will be addressed.
Support and Resources
The following webpages have been updated. If you are seeing the old rates, try refreshing the page in your browser or clearing your browser cache.
Contact Sponsored Financial Services if you have questions or concerns.
Frequently Asked Questions
- Why is the benefit rate changing?
In late 2023, a decision was made to reduce the 37% benefit rate starting in fiscal 2025. However, benefit expenses rose sharply in fiscal years 2024 and 2025. As a result, the benefit rate no longer fully covers the cost of benefits. To avoid accumulating a deficit that would affect future years, leadership decided it is fiscally prudent to recognize the cost now.
- Why aren’t federal grants and contracts and other federal funds being affected by this change?
Our federal rate agreement runs through fiscal year 2027, so we cannot make an adjustment to federally funded activities at this time. Since most grants and contracts are federally funded, we are extending this treatment to all grants and contracts for simplicity.
- What rates should I use for my grant proposals?
You can use the rates listed on the Employee Benefit (Fringe) Rates page on the Research Services website.
- What do I do if I think my account was charged the wrong amount or had an incorrect benefits commitment?
Updates will be made during the first three weeks of November. If you still see incorrect values after November 24, 2025, please send email Sponsored Financial Services. Make sure to include the EmplIDs and account numbers of any affected individuals.
