Accounting for Government Contracts – Fringe, Overhead and G&A

If you are planning to have the U.S. Government as a client, you will need to have your accounting systems set up so you can handle their accounting requirements. Regardless of whether you are engaging in a plain vanilla contract or an SBIR grant, you will be required to negotiate fringe benefit rates, overhead rates, and general and administrative rates.

Fringe benefits rates include

  • Compensated Absences, such as Vacation, Holidays, and Sick Leave;
  • Medical Programs, such as Health and Dental Insurance;
  • Retirement, such as the Defined Contribution Portion of your Retirement Plan and Plan Service Fees;
  • Long-term Disability Coverage;
  • Worker’s Compensation Coverage; and
  • Employee Wellness, such as Fitness Club Membership and Other Wellness Programs

Overhead covers direct and indirect support of the employees whose time is being billed to the Government. This includes items like

  • Rent (only for the space that those employees use);
  • Depreciation of their furniture and equipment;
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