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Proposal Budget Categories


Institutional Base Salary (IBS) is the annual compensation paid by the university to an employee for all work which benefits the university. The university defines IBS as wage types (1) regular pay, (2) administrative pay, (3) agency pay, and (4) professorships.  IBS excludes outside consulting or medical practice income earned outside the university.  During the summer months, nine-month faculty may earn extra-service pay on grants and contracts, provided that the total income earned, including pay for summer teaching and/or administration, does not exceed 33 1/3 percent of the individual’s base salary. Effective Daily or Hourly Salary Rate If possible, the annual/monthly rates should be used on proposals. However, properly computed daily or hourly rates may be used: (1) when short periods of service are required, (2) when sponsors specifically required this method, or (3) to calculate compensation for appropriately approved extra services on grants and contracts. The following guidelines apply for all campuses and institutes unless an alternate calculation procedure has been approved by the chief financial officer (or designee). Faculty on Academic Year Appointments. The academic year is defined as 39 calendar weeks ending on the date of commencement for spring semester. When salary allocations are made on a daily-rate basis for faculty on an academic year appointment, the rate is the current academic year salary divided by 168 days. Allowance is made here for official university holidays as well as an allowance for days of administrative closing. When an hourly rate computation is necessary, eight hours are considered a duty day. Similarly, for such work performed in these categories during summer semester, the semester is defined as 56 duty days, and the applicable daily rate is also the current academic year salary divided by 168. Faculty and Professional Staff on Twelve-month Appointments. To convert the salary of a faculty or professional staff member appointed on a twelve-month service basis to an effective daily rate, divide the current annual salary rate by 224 duty days. This figure reflects an allowance made for annual leave, official holidays, and days of administrative closing. To compute an hourly rate, eight hours are considered a duty day. Salaried Non-exempt Staff Appointments. To convert the salary for non-exempt staff to an effective daily rate, 260 work days reduced by 7 holidays, 5 administrative closing days, and the individual employee’s annual leave accrual rate determine the effective number of duty days. This number is then divided into the base annual salary to obtain the appropriate daily rate. To compute an hourly rate, a duty day consists of eight hours.

Working with Salary Caps

Awards from the National Institutes of Health (NIH) are subject to a salary rate cap. The salary rate cap is set by NIH and is adjusted periodically.  For the current salary rate cap, contact the Office of Sponsored Programs. Salary charges above the rate cap may not be charged to NIH awards; however, it is important that the effort expended working on NIH awards should be accurately stated. Salary above the rate cap should be moved to a discretionary fund using the cost sharing cost element.

Fringe Benefits

Fringe Benefits for faculty and staff are charged their actual fringe rates.  To calculate the fringe benefit rate, divide the TOTAL UT PAID BENEFITS by the Total Salary (total salary includes the institutional base pay, longevity, bonus pay and additional pay). This information can be found on your personal benefits statement that is included with your pay statement or by contacting your business manager or the Office of Sponsored Programs. Fringe benefits includes retirement, Social Security, unemployment, workers’ compensation, group insurance, and 401K Matching. It is recommended to use an individual’s actual fringe rate. However, if the situation calls for an estimated fringe rate to be used, contact the Office of Sponsored Programs for the current average rate. For 9-month appointments, a lower rate will be used for summer benefits than what is used during the academic year. Contact your business manager for the summer rate that needs to be used. Download the Fringe Benefit Rate Calculator.

Graduate Health Insurance

Every graduate student employed at least 25% time as a Graduate Assistant, Graduate Teaching Assistant/Associate and/or Graduate Research Assistant/Associate will automatically be enrolled in the Graduate Student Employee Insurance Program with premiums paid by the employing department. Graduate health insurance is a fixed amount that is set for each fiscal year. For the current rate, questions or more information, please contact the Office of Sponsored Programs at

Undergraduate Student Fringe (FICA)

When an undergraduate student is working on a proposal but is not taking classes at the time he/she is working, an 8% fringe rate (FICA) is used. This fringe covers their payroll taxes. No health insurance is paid for undergraduate students. NOTE: When a graduate student is working but is not taking classes, FICA is also charged.

Graduate Maintenance, Tuition, and Fees

Visit the OneStop Express Student Services page for a complete listing of Tuition and Fees. For Graduate Students on a project, only the maintenance fee is charged to the sponsor. University Graduate Assistants (GA), Graduate Research Assistants (GRA), Graduate Teaching Assistants (GTA) and Graduate Teaching Associates (TA) who are employed at least 25% time on University payroll records receive certain tuition and/or maintenance waivers. University fees include a maintenance fee (required of all students), tuition (additional for out-of-state students), a program and services fee, and a technology fee. The waiver of fees for assistantships applies to maintenance and tuition fees only; it does not include the program and services fee, the technology fee, the facilities fee, or the transportation fee. For Graduate Research Assistants the maintenance fee is paid by the granting agency and is in addition to the stipend paid. For more information, view the Policy for the Administration of Graduate Assistantships


Equipment is defined by an article of nonexpendable, tangible property having a useful life of more than one year and an acquisition cost which equals $5,000 or more. When purchasing equipment on a sponsored project it is often beneficial to have vendor quotes for each item. Also, F&A is not charged on equipment costs. More information can be found in Fiscal Policy FI0605.


Consultants are individuals outside of the university who are provided expertise to a given project or providing a service to the project that is consistent with their normal course of business activities. These individuals are not considered to be providing significant intellectual contributions to the project and do not guide the project’s technical direction. When including a Consultant on a sponsored project, a letter of commitment stating the Consultant’s hourly rate should be included with the proposal.


Subawards are typically institutions (such as another university) that are performing a substantial portion of the work and have partial control of the technical direction of the project. When subawards are included in the sponsored project budget, F&A is collected on the first $25,000 of each subaward only. At the time of proposal, each subaward must complete the Subrecipient Commitment Form  and provide a Statement of Work, budget, budget justification, and a letter of commitment signed by an Authorized Official of the institution. More information can be found in Fiscal Policies FI0205 and FI0230A guide to help determine if an entity is a subrecipient, contractor/vendor, or consultant can be found here.