Salaries represent the largest component of costs charged to sponsored projects. It is essential that University faculty and staff who are responsible for managing projects understand the basic principles underlying the allocation of effort and the corresponding charging of salaries to those projects.
An individual’s total effort is the amount of time spent on work-related activities (instruction, research, patient care, administration, etc.) for which the University compensates the individual. Effort devoted to a project is often assigned as a percentage. This is calculated by the amount of time spent on a particular project divided by total time spent on work-related activities. Effort is distributed based on a total hours worked (on average for the individual) and is not restricted to a 40 hour work week. An individual’s total effort will never exceed 100%, regardless of how many hours they work.
Faculty and exempt professional staff are not required by the University to keep track of hours on a daily or weekly basis, but should maintain a good sense/estimate of what they do on an average by month to be able to provide a reasonably accurate breakdown of effort. Salary charges should be consistent with actual effort. Appointment in the Human Resources (HR) system should reflect the anticipated effort that is expected to be devoted to a project. When significant change in work activity charged to projects will occur or has occurred, an HR change of appointment should be processed as soon as possible. Short term fluctuations between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term (i.e. three months).
The university uses Personnel Activity Reports (PARs) to identify how faculty and staff effort is distributed to Federal awards. See Effort Reporting for more information on the University effort system.
Appointment Terms (most common):
- Fiscal Year: represents a 12-month appointment for a fiscal year (July 1 through June 30). Compensation is paid in 12 monthly installments. The proportion of funding from sponsored projects is based on expected/actual effort.
- Academic Year: represents a 9-month appointment for the University’s academic year (see 2016-17 Academic Payroll Calendar). Academic appointments are usually assigned to Paygroup 8 and are paid in 12 monthly installments (August 1 to July 1). The proportion of funding from sponsored projects is based on expected/actual effort during the academic year.
- For sponsored projects, since the salary is paid out over 12 months, the distribution of salary has the potential to conflict with the actual effort commitment during the academic time period. See Faculty Paygroups and Payment Schedules for more information. Contact Grant Accounting for guidance.
- Summer Session: individuals with an academic appointment may be employed by the University outside of the academic year on a part-time or full time basis during the summer session. Compensation is based on the preceding academic year rate of pay and is paid out June 1 – Sept 1 based pm days worked, length of appointment, and calendar days. The proportion of funding from sponsored projects is based on expected/actual effort over the summer months.
- Funding from sponsored projects will generally not be provided on a full-time basis (3 full summer months). See Guidance for Faculty Summer Appointments on Sponsored Projects for more information.
- Winter Session: the University defines the academic year as a continuous period from three days before the first day of classes through spring commencement day. Faculty with academic appointments are assigned a base salary for the entire academic period. As the winter session does occur during the defined academic year, winter session appointments to provide additional compensation from sponsored projects are not allowed.
The base salary (sometimes referred to as Institutional Base Salary or IBS) is the annual compensation regardless of funding source paid by the University to an individual whose time is spent on research, instruction, patient care, administration or other activities. Base salary:
- Includes salary provided as part of assigned duties
- Excludes bonus payment and extra compensation
- Excludes any income that an individual is permitted to earn outside of University responsibilities
- May not be increased as a result of obtaining grant funding
How to calculate Base Salary
For individuals who have a Fiscal Year appointment, use the current annual salary.
For individuals who have an Academic Year appointment:
- For months during academic year (0 to 9 months), use the current academic year salary.
- For months during the summer (0-3 months), one-ninth of preceding academic year salary times # summer months.
- For example, to calculate two summer months when previous academic year salary is $90,000 (90,000/9=10,000; 10,000x2 = 20,000).
For individuals who have multiple effective appointments, all current annual salary should be included.
For individuals who have a joint VA appointment, the amount of VA salary should also be included.
- VA appointments are identified in HR as Paygroup 6 and UI employment category VA1.
For awards and individuals subject to a salary cap (e.g. DHHS Salary Cap), use the effective salary cap amount as the base salary when identifying the committed and sponsor funded effort.
- To calculate the excess salary not allowed, take actual base salary less effective salary cap amount.
Salary limitations (salary caps) established by sponsor
The U.S. Congress limits the direct salary an individual may receive from awards issued with Department of Health and Human Services (“DHHS”) funds. The salary limitation (“cap”) is currently restricted to Level II of the Executive Pay Schedule authorized by the U.S. Office of Personnel Management. See DHHS Salary Cap – University Guidelines and Procedures for more information including requirements on how to track the amount over the cap in a unique salary cap account in the University general ledger.
Some non-federal sponsors also impose salary limits. The amount in excess of the salary cap for non-federral awards is not tracked in a unique salary cap account in the University general ledger. Some other sponsors that impose salary caps:
- Cystic Fibrosis Foundation, Juvenile Diabetes Research Foundation, National Multiple Sclerosis Society, Susan G. Komen, include some examples). NOTE: this list is not exhaustive. It is important to read the sponsor solicitation to determine if they have a salary cap.
Information on Different Employee/Compensation Types:
- Principal Investigator & Other Key Personnel
Salaries for PI and other key personnel named in the grant award are directly charged to sponsored projects in proportion to the amount of effort devoted to the project for the time period. If this is less than the amount of effort that was committed to the sponsor, the difference should be charged to a cost share account. If there is a salary limitation for DHHS Salary Cap, the amount that exceeds the allowed rate must be charged to a salary cap account. Salary limitations (or caps) established by other sponsors are not tracked in salary cap accounts, but must be considered when assigning effort and salary to the project.
For Federal awards, sponsor approval is required in advance for the following:
- PI disengagement from project for more than three months
- 25% reduction in time devoted to project by PI
- Change in key person identified in the application or award
Other sponsors may have additional requirements for advance approval.
These requests must be routed through the Division of Sponsored Programs.
- Graduate Research Assistants
Graduate Research Assistants (Grad RAs) are student employees, earning a compensation for the performance of research. They are directly charged to the project in proportion to the effort devoted to the project. Many Grad RAs are covered under the negotiated COGS contract which establishes specific salary rates as well as funding of tuition & fees. Unless the sponsor specifically restricts tuition/fees, they can be directly charged to the project at the same proportion of the total salary.
The maximum amount NIH will award for the support of a graduate student on a research grant or cooperative agreement is tied to the NRSA zero-level stipend in effect at the time the grant award is issued on the Federal award date. The schedule for NRSA stipends can be found at http://grants.nih.gov/training/nrsa.htm. The amount provided for compensation includes salary or wages, fringe benefits, and tuition remission.
Compensation include salary, fringe & tuition remission. See Graduate College Graduate Assistantships for current salary and tuition scholarship amounts.
- Post Docs (FP01) and other Technical/Programmatic Staff
Salaries for Post Docs and other technical/programmatic staff are directly charged to sponsored projects in proportion to the amount of effort devoted to the project for the time period.
- Trainees, Fellowships, Participants
Provided as a stipend to support individuals to further their education, professional development and/or participation in a recognized training or fellowship program. These individuals are not considered employees. For more information, see University Human Resources - Fellowship Payments.
- Administrative and Clerical staff
Salaries for administrative and clerical staff are not normally allowed on sponsored projects. See Clerical & Administrative - Guidelines for Charging to Externally Sponsored Projects for more information.
- Biweekly students/non students and temporary employees
Students and other temporary appointments are directly charged to sponsored projects based on actual (hourly) time worked on the project as recorded on bi-weekly time records. For information about allowable benefits for temporary employees, see University Human Resources – Temporary Employee Benefits.
Under the Affordable Care Act, employees who average more than 30 hours a week during a defined measurement period in the prior calendar year are eligible to receive health insurance while they are employed during the next full calendar year. See Temporary Employee Health Benefit Charges – ACA for more information on how to identify with and charge to sponsored project.
- Extra Compensation
Faculty are not allowed to charge sponsored projects for additional/extra compensation that is above their base salary unless they are identified as a special exception in the UI Ops Manual and explicitly approved by the sponsoring agencies. The special exceptions include:
- When the faculty member is assigned to work overseas and an overseas differential is specifically authorized by the grant or contract
- Faculty member serves on a strictly limited basis as consultant on a research or training project for with principal responsibility lies with a faculty member in another college (or within CLAS, another department); the work involves a separate or remove operation; and the work is in addition to the consultant’s regular departmental load. Must obtain written approval through the proposed consultant’s DEO, College Dean, and the Provost. Request for approval must evidence the following:
- Service is essential and cannot be provided by persons receiving salary support under the grant;
- The charge is appropriate considering the qualifications and normal charges of the consultant and the nature of services provided;
- The sponsoring agency has approved extra compensation for the services.
Last updated 04/20/2017