Fiscal Year Memo 2026-01: Fiscal Year 2026 Proposed Fringe Benefit and Payroll Tax Rates
The purpose of this memo is to advise departments of the proposed fringe benefit and payroll tax rates for Fiscal Year 2026.
Pursuant to M.G.L. c. 29, §§ 5D and 6B, the Comptroller is required to recover fringe benefits from all federal grants and non-budgetary funds. In addition, the Comptroller is also required to recover employer payroll taxes for Unemployment Insurance, Universal Health Insurance, Medicare Tax and Paid Family Medical Leave. Per statute, the methodology for setting rates to recover fringe benefits and payroll taxes is to be determined by the Secretary of Administration and Finance. Pursuant to Administrative Bulletin No. 5 (A&F5), entitled “Fringe Benefits, Payroll Taxes and Indirect Costs,” the Secretary has designated the negotiation and setting of these rates to the Comptroller.