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Salary and Fringe Benefits


The salaries category is for MSU employees providing effort to the project.  At a minimum, the budget should show the employee's name, role on the project (e.g. PI, Co-PI, MSU-HR title if appropriate), level of effort stated in person-months and the amount requested from the sponsor.  The justification should include a brief description that identifies them to specific project activities.

Salary Rates

MSU faculty and staff salary rates can be found using the Budget Module in the Proposal Development (PD) document (in the Kuali Research system).  The Budget Module pulls an employee’s Institutional Base Salary (IBS), which includes the following activities: instruction, research, public service, outreach, and administration.  Graduate Assistant salary ranges can be found at: HR Grad Assistant Salary Ranges.  The rates should be inflated in the 1- 4% range for each succeeding year. Please note that some federal agencies, require special justification for annual salary increases in excess of 3% for multi-year proposals. For MSU faculty and staff, documentation of time expended on federally sponsored projects is based on percentages of effort worked rather than hourly rates.  If a sponsor requires an hourly budget breakdown and the tracking of cost share/effort reporting on an hourly basis, we should include the following statement at the bottom of the budget:

“The hourly rates reflected above are being provided for informational and comparison purposes only.  MSU does not maintain documentation of hours worked for its faculty and staff, with the exception of undergraduate students, but rather maintains documentation to support time expended on federally sponsored projects based on percentages of effort worked.  This documentation is maintained in accordance with OMB 2 CFR Part 200- Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.”

To calculate an hourly rate, use the individual's base salary divided by:

  • 1,784 hours (223 days) for faculty with annual appointments (12 month or AN - 2,080 less 176 vacation hrs,  less 104 holiday hrs, less 16 personal observance hrs)
  • 1,456 hours (182 days) for faculty with academic appointments (9 month or AY - 2,080 less 88 holiday hrs, less 520 summer hrs, less 16 personal observance hrs)
  • Full time staff appoints: use the applicable staff union contract average or 2,080 (260 days)

Research Associate (i.e. postdoc) Salaries

Per the August 18, 2021 memo sent by Provost Teresa K. Woodruff, the minimum salary for research associates is $50,637 (AN) / $41,431 (AY).  Inflationary increases follows the standard 2-4% range.

NIH Salary Cap

The National Institutes of Health (NIH) imposes a cap on the level of salary an individual can be paid on an NIH funded award.  The current salary cap as of January 1, 2024 is set at the Executive Level II salary, which is $221,900 ($166,425 for AY faculty and $55,475 for summer salary).  When developing your budgets, if your proposal calls for a detailed budget you should include the full salary rate and include a note in the budget justification notifying NIH that the individual is over the established salary cap.  NIH will cut the award by the amount over the current salary cap at the time the award is made.  If your proposal calls for a modular budget, you should develop your modular budget using the capped rate when determining which module to request.

Administrative and Clerical Staff

If administrative or clerical services are integral to the proposed project or activity, and the individuals involved can be specifically identified with the project at the award stage, then the cost should be identified in the proposal budget with a detailed description of the duties to be performed in the budget justification.

Intra-Institution of Higher Education (IHE) Consulting (also referred to as Overload)

Intra-Institution of Higher Education (IHE) consulting by faculty is assumed to be undertaken as part of their normal duties requiring no additional compensation to their Institutional Base Salary (IBS). However, in unusual cases where consultation is across departmental lines [different last 3 digits in the CUC code] or involves a separate or remote operation, and the work performed by the faculty member is in addition to his or her regular responsibilities, additional compensation above their IBS may be allowable. The IHE consulting arrangements must be included in the Budget Justification, with the name of the individual receiving the IHE consulting payment specified. The IHE consulting rate should be budgeted at the faculty member's estimated hourly rate with 7.65% for fringe benefits.

Fringe Benefits

Fringe amounts for faculty and staff are calculated based on the budgeted salary using the Specific Identification (SI) method.  See link for more details regarding SI and other fringe benefit rates that apply by employment type. 

To assist you with calculating the appropriate SI rates we have provided the following budget tools:


What is included in Institutional Base Salary?

Institutional base salary (IBS) is the annual compensation paid by Michigan State University (MSU) for an employee's appointment (including regular pay, summer pay, guaranteed clinical pay and administrative supplements), whether that individual's time is spent on research, instruction, administration, or service. Institutional base salary excludes any income that an individual is permitted to earn outside of duties performed for MSU or other payments (e.g. overload payments, bonuses, additional pay, distinguished faculty supplements). IBS shall include salary paid from State funds, Grants or Contracts*, Gifts and Endowments, and other MSU funds. 

*When requesting faculty salary support from a Sponsor or committing unreimbursed effort (i.e. mandatory or voluntary committed cost share) on a Sponsored Program for research or other sponsored activities, the amount of salary requested or effort committed must be based on the individual’s IBS. 

Retired Faculty Member: Can a retired PI submit a proposal and what would be the applicable fringe?

Yes, a Chair can approve a retired/Emeritus PI to submit a proposal.  The PI should obtain an appointment commitment letter from their Chair addressing salary and any needed resources (e.g. office space, etc.), and process a Proposal Development document before the proposal is submitted.  A retired PI's fringe benefit cost is usually 7.65% of salary to cover FICA (Federal Insurance Contributions Act) tax; the PI and Department may want to confirm this with MSU HR when budgeting fringe. Please note to be the PI/Co-PI on an awarded federal project as an retired/Emeritus faculty member, the Emeritus faculty member must have an active paid appointment for the period for which the award is active. This appointment can be less than 100% and as small as 1%, but has to be for the time period of the project and has to represent at least the percent of effort on the sponsored program. Also, rate of pay charged to the project has to be consistent with the rate of pay at the time of retirement.

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