Prevailing-Wage Package: Cash vs Bona-Fide Fringe
Package = base wage + fringe; paying the fringe as cash makes it taxable wages.
Example
You enter
- Base hourly wage ($/hr) 35
- Fringe rate from the determination ($/hr) 15
- Wage-based burden (payroll tax + comp, %) 7.65
You get
- Required package 50
- Saving via a bona-fide plan $1.15/hr
Checked against published worked examples from: U.S. Department of Labor, Wage and Hour Division.
Details, formula, and sources
ScopeFunding it through a bona-fide plan does not, saving fringe x the wage-based burden per hour. $35 base + $15 fringe at 7.65% -> $1.15/hr saved; a fuller 15% burden saves $2.25/hr. The wage determination and the plan's bona-fide status govern.
Formula or tablepackage = base + fringe; cash_burden = fringe x burden%; plan_saves_per_hr = fringe x burden% (fringe funded through a bona-fide plan is not taxable wages).
Source and editionThe prevailing-wage total package (base wage plus fringe) and the payroll-burden savings of paying fringe through a bona-fide plan versus as cash, by name.
Free accessPrevailing-wage determinations are published free at sam.gov (Davis-Bacon) and state DOL sites; the burden rate is user-supplied.
What governsEstimate. AHJ and licensed professional govern.
API field namesbase_wage_hr, fringe_hr, payroll_tax, package_hr, savings_hr
- Package total package = base wage + hourly fringewage determination
- Bona-fide plan fringe paid into a bona fide plan counts toward the prevailing wage, and employer contributions to qualified retirement and health plans are generally not FICA wages; cash fringe is taxable wages40 USC 3141(2)(B); 29 CFR 5.20-5.32; 26 USC 3121(a)(2), (a)(5)
- Unfunded plans a self-funded (unfunded) plan's cost is credited only after the contractor requests and receives the Secretary's approval (added 2023-10-23)29 CFR 5.28(b)(5)
- Determination governs the wage determination and the plan's bona-fide status governscope of this tile