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Salary and Fringe Benefits

Salaries

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 OSP Salary Budget Builder.  The Salary Budget Builder 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:

  • 1,832 hours (229 days) for faculty with annual appointments (12 month or AN - 2,080 less vacation hrs 176 less holidays hrs 72)
  • 1,504 hours (188 days) for faculty with academic appointments (9 month or AY - 2,080 less holidays hrs 56 less summer hrs 520)
  • Full time staff appoints: use the applicable staff union contract average or 2,080 (260 days)

New Fair Labor Standards Act Regulations - Budget Impact

Effective December 1, 2016, the Fair Labor Standards Act (FLSA) will be revised to increase the annual pay threshold for non-exempt employees to receive overtime up to $47,476. This change could have an impact on budgeting your project. For example, when a non-exempt employee makes less than $47,476 annually they will be subject to overtime (i.e. pay for working more than forty hours for a given work week). We anticipate this will primarily impact research associates (i.e. postdocs) budgeted on grant accounts. Therefore, please take this into account when preparing your proposal budget. To calculate their overtime hourly rate take their Annual salary divided by 2080 (# of work hours in a year) then multiply the number of overtime hours anticipated by the 1.5 overtime factor. Fringe benefits assessed to overtime pay should be budgeted at 7.65%.

See the https://www.hr.msu.edu/flsa/ website for additional information.

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 is set at the Executive Level II salary, which is $183,300 ($137,475 for AY faculty).  The salary cap will be increasing to $185,100 ($138,825 for AY faculty) effective January 10, 2016.  When developing your budgets, if you’re 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:

FAQs

Regular Pay, Summer Pay and Administrative Increment.  Excluded items include: Outside work for pay; Health Service Related Component (HSRC); Overload payments; Miscellaneous pay; One time merit pay; Special project pay; Fellowships; Longevity; Overtime; Student hourly pay; On call/temp pay; Workers compensation

Yes, a Chair can approve a retired (also called 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.) if the project is funded and process an eTransmittal 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.

Category: Proposal Development    Subcategories: none

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