Salary and Wages
The largest proportion of most projects’ budgets is allocated to personnel costs. It is not unusual for half or more of a project’s direct costs to be for personnel-related costs – salary, wages and fringe benefits. To estimate personnel costs, you need to identify all the individuals who will work on the project, their level of effort to be committed to the project, and their rate of compensation. The effort committed for each individual should be reasonable in the context of the project’s needs and the individual’s other institutional obligations. The guiding principle is the notion of allocability – the project should be charged in proportion to the benefit received.
Project effort is the proportion of an individual’s total institutional effort proposed to be committed to a specific project or activity. For effort reporting purposes, total institutional effort represents 100%, regardless of the individual’s appointment. No individual may commit more than 100% institutional or summer effort or be compensated at a rate that would exceed their annualized IBS. See Effort Reporting Policy and Effort Reporting FAQs for additional information.
Alert: Time devoted to grant writing or any other activities that do not directly benefit the project’s objectives may not be charged to a federal sponsor.
Budgeted salaries/wages are based on current IBS for the employee (or employee classification if ‘to be hired’) in proportion to the effort devoted to the project. Out-year salaries and wages as escalated by 3% per year, a rate consistent with historical levels. Escalations or salaries that deviate from these norms require HR or supervisor approval.
Institutional Base Salary
IBS is the annual compensation that the University pays for an individual’s appointment, whether that individual’s time is spent on research, teaching, service, or other activities. IBS excludes bonuses, one-time payments, incentive pay, or any income that an individual may be permitted to earn outside of the duties performed for the University.
Special Considerations:
- IBS is established annually in an appointment letter regardless of funding source.
- IBS includes regular salary as well as secondary assignments (e.g., department chair) and university service.
- IBS excludes bonuses, honoraria and extra compensation.
- All University employees must be budgeted as salary and cannot be included as outside consultants or vendors.
- Level of compensation may not increase solely as the result of an increase in sponsored funding.
IBS and Sponsored Projects
When requesting or charging salary to sponsored projects the percent of effort (in person months) must be based on the individual’s IBS. The portion of effort multiplied by the IBS will establish the correct salary request from the sponsor.
Other Considerations:
- Increased or decreased effort (from what was originally proposed) may require the prior approval of the sponsoring agency, depending on the specific award terms and conditions. Please see Effort Reporting for more information.
- Compensation for incidental activities may be allowable on sponsored awards, provided that: (1) the work performed is directly related to a sponsored project, (2) has been authorized in the awarded budget or prior approval has been obtained from the funding agency, and (3) the rate of pay is consistent with an individual’s IBS.
- Examples of allowable incidental activities include: delivering special lectures about specific aspects of the ongoing activity, writing reports and articles, developing and maintaining protocols (human, animals, etc.), managing and securing project-specific data, coordinating research subjects, participating in appropriate seminars, consulting with colleagues and graduate students, and attending meetings and conferences.