Salary and wages on a sponsored project are budgeted using an individual’s current salary base or his/her anticipated salary base. A minimum of 3% inflationary increase is recommended for each additional project year budgeted. Inflationary increases are budgeted as of July 1st of each subsequent year. Please note that this is a recommendation only, and is not a mandatory budgeting requirement.

Current Salary for Faculty & Staff

If an individual being budgeted is a current employee of the University, then his/her salary should be budgeted based on the individual’s current salary and appointment type. There are two ways to budget faculty & staff time on a project. The first option is to budget based on the number of months being committed to the project. The second option is to budget salary based on a percentage of time being dedicated to the project. Please see below for an example of each method:

Example #1 – Months Committed: A faculty member will be committing two (2) months to work on a sponsored project. This individual earns $90,000, and is on a 9-month appointment. In order to find out how much to budget for two months, we first need to find out how much this individual earns on a monthly basis. Therefore, we will take his/her salary and divide it by his/her appointment length (i.e. $90,000/9)*. In this example, our faculty member’s monthly rate is $10,000. We then take the monthly rate and multiple it by the number of months being committed on the project. Consequently, the appropriate amount to budget will be $20,000 in Year 1 (i.e. $10,000 x 2). Then, if the amount of time committed doesn’t change in the next year, the appropriate amount to budget in Year 2 would be $10,300 [i.e. $10,000 x 1.03 (using the minimum of 3% recommended inflationary rate)].

* This method is the same when budgeting a 12-month employee. The only difference is that we would divide the employee’s salary by 12 months (versus the 9 months as used above).

Example #2 – Percentage of Time Committed: A research associate will be dedicating 25% of his/her time on a project. This individual earns $55,000 on a 12-month appointment. Therefore, in this scenario, we would budget $13,750 in Year 1 (i.e. $55,000 x 25%), and $14,162 in Year 2 (i.e. $13,750 x 1.03).

Important items to keep in mind when budgeting faculty & staff

  1. Effort should be described in terms of monthly effort NOT hourly effort. The University’s effort reporting system is based on monthly effort (or a percentage thereof). Review the Monthly Effort Reporting Justification for further information. This information should be added to your budget justification if the sponsor requires hourly rates.
  2. Keep in mind that there may be sponsor caps on how much time an individual can commit to a project.
  3. Departments may also have guidelines on how much effort an individual should expend on research efforts. Therefore, please find out what your department head’s expectations are when budgeting salary release or summer pay.
  4. Honoraria to an employee should be budgeted under salaries carrying the appropriate fringe benefit. Please visit the Board of Governors website for additional information for more information.

Highlights on NSF and NIH Budget Guidelines

  1. The National Science Foundation (NSF) permits a maximum amount of two months of salary per year for senior personnel from all NSF awards. Budgeted salary greater than two months in a year must be justified and specifically approved in an award notification.
  2. The National Institutes of Health (NIH) restricts direct salary reimbursement to $192,300 per year (effective 01/06/2019).
  3. NIH no longer allows inflationary increases for all grant awards.

Post Doctoral Associates, Graduate Students & Temporary Employees

Base post doctoral associates, graduate students & temporary employee salaries on either your department’s guidelines [i.e. your department generally pays its graduate students $25,000 for a nine (9) month appointment], or from previous projects with similar positions (i.e. your department paid a webmaster $25.00 per hour on a similar research project last year).

Example #1 – Graduate Students: When budgeting for a graduate student, it is important to find if the appointment will be for nine (9) months or twelve (12) months. Graduate students should not work more than 20 hours per week during the academic months, and no more than 40 hours per week during the summer months. For example: A project will utilize the services of a graduate student earning $20,000 on a 9-month appointment for two project years. Therefore, the amount budgeted in Year 1 is $20,000; and the amount budgeted in Year 2 is $20,600 ($20,000 x 1.03).

Example #2 – Temporary Employees: Temporary employees (i.e. undergraduate assistants, specifically-required paraprofessionals, etc.) can be budgeted using an hourly rate, or using a flat rate. For example: A project will need to hire a webmaster for 100 hours during Year 1 and 50 hours during Year 2. The individual’s rate of pay is $25 per hour. Therefore, the amount budgeted in Year 1 will be $2,500; and the amount budgeted in Year 2 will be $1,250.  Please note that temporary employees are exempt from the University’s effort reporting system.

For specific guidance on this matter call SPARCS at 515.2444 or email