Procedure: 403.A-Calculating Rates for Revenue Producing Activities (RPA)
Appendix Definitions and Explanations
- Annual Salary
- Salary paid to employee before any deductions.
- Fringe Benefit Hours
- Number of hours earned for vacation, holidays and sick leave during applicable period.
- Fringe Benefit Hours Used
- Number of hours used for vacation, holidays and sick leave during applicable period.
- Fringe Benefit Rate
- Fringe benefit percentage rate applicable for any particular payroll classification for the year for which rates are being calculated. Current fringe benefit rates are available from The Office of Research and Sponsored Programs Web page.
- Fringe Benefit Dollars
- Annual (or base period used) salary multiplied by applicable fringe benefit rate percentage.
- Total Salary Dollars
- Annual salary (or base period used) plus fringe benefit dollars. Costs of fringe benefits are a cost of the period during which they are earned, whether or not used during that period. Therefore, when calculating total annual salary dollars, the cost of all fringe benefits related to salary earned that year are included.
- Assignable Hours
- Total hours an employee would have worked if exact number of fringe benefit hours allocable to that period were used.
- Cost Per Actual Hour Worked
- Total salary dollars divided by assignable hours. Cost per assignable hour and cost per actual hour worked are the same only when earned hours are used. When cost per hour worked are based on historical usage these costs will vary.
- Actual Hours Worked
- Total hours for which employee was paid less fringe benefit hours actually used.
- Billable Hours
- Only those hours that are directly billed to a specific project or allocated to a direct or indirect cost area.
- Billable Hours Ratio
- (Expressed as a percent) = Billable Hours divided by Actual Hours Worked. Assignable hours multiplied by this percent gives the base hours.
- Unbillable Hours
- That portion of time of an employee who is directly involved in a project (as opposed to administrative or maintenance employees for example) spent on matters not directly chargeable to a project. (e.g., cleanup, departmental meetings, break time, reading mail, etc.).
- Base Hours
- Number of hours by which total cost in all categories must be divided to arrive at rate per billable hour. (For method of calculating, see Billable Hours Ratio).
- Composite Rate
- Final rate which includes two or more cost categories. Also, a labor rate which includes two or more individuals, or classes of individuals, having different rates of pay, for which the costs are averaged in calculating the rate.
- MTDC
- Modified Total Direct Costs - the University overhead (not RPA) rate negotiated with the federal government is a percent of Modified Total Direct Costs. These costs include salaries, fringe benefits, materials and supplies, travel and subgrants and subcontracts up to $25,000. The 1998-99 rate is 44%.
- University Overhead Rate
- Percentage of total modified direct costs which is charged to cover such indirect costs as utilities, libraries, business services, etc.
Procedure: 403.A-Calculating Rates for Revenue Producing Activities (RPA)