As recipients of federal funding, higher education institutions must comply with the regulations for charging salaries to grants to promote stewardship and accountability over funding. Institutional Base Salary (IBS) is the salary paid to an individual for all the work performed at NYU, whether research, teaching, administration, patient care or other activities.

NYU Approach

It is the policy of New York University (“University”) that all faculty salaries charged to sponsored projects must be based on the Institutional Base Salary (IBS) defined in this policy. It applies to all individuals whose salary is charged or with committed effort to sponsored projects. The IBS is the baseline against which effort expended by faculty in performing work under a Federal award is measured. 

Institutional Based Salary is the annual compensation that NYU pays a faculty employee, whether that individual's time is spent on teaching, research, service, or administrative duties.  The compensation relevant in determining the IBS is the Departmental Base Salary (DBS), assigned yearly to that individual for teaching, research and service, and any increases in this base due to additional responsibilities undertaken during regular University semesters.

Effort and Salary Rates for Faculty

Standard Faculty Effort

The academic year time is divided into three portions: T devoted to teaching, R to research and S to service and administration, such that T+R+S = 100%. The standard distribution is T=45%, R=45% and S=10%, although individual schools or departments may set their own distributions. The teaching portion is usually associated with a specific number of courses N, which should be defined for each department. Any increases to this Departmental Base Salary due to additional responsibilities undertaken during regular academic year semesters would change the latter into the “Institutional Base Salary”, and is the salary used in the Time and Effort reports required for faculty engaged in sponsored programs. The increases that constitute the difference between the departmental and institutional base salaries are expected to vary from year to year, as the activities leading to those supplements vary.

Summer Salary

Salaries for work performed by nine-month faculty on sponsored projects during the summer months will be determined for each faculty member at a rate not in excess of the institutional base salary divided by the period to which the base salary relates. For example, for faculty with 9 month appointments, the rate of pay for one summer month is calculated as 1/9th of the IBS. Due to the results of recent federal audits, which highlighted the fact that faculty effort is rarely devoted exclusively to the conduct of a sponsored activity, NYU’s policy is to permit a maximum of 95% to be charged to a sponsor in any given month, including the summer. 

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Salary Cap

Sponsors that have a cap on salary limit the amount of IBS that can be charged to a sponsored project. When such limitations apply, the requested salary support is determined by multiplying the proposed level of effort by the amount of salary allowed and as restricted under the Sponsor’s salary cap policy.  (Please reference NYU’s Salary Cap Administration Policy for questions about NYU’s administration of a sponsor’s salary cap requirements).

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Documentation of Institutional Base Salary  

At the time of hire, all faculty employees should receive an official letter or notification which specifies their IBS. Employees receiving an adjustment in salary due to an annual increase or a promotion should receive a letter or notification documenting their new IBS and the effective date of the change.

Institutional Base Salary in Sponsored Programs Proposals

When requesting faculty salary support from a sponsor or committing unreimbursed effort on a sponsored project, such as mandatory or voluntary committed cost sharing for research, teaching/training or other sponsored activities, the amount of salary requested or effort committed must be based on the individual’s Institutional Base Salary (IBS).

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Accounting for IBS

To determine the amount of faculty IBS per month (it is the same whether it is academic year or summer months) the following formula must be used:

Monthly IBS = Annual IBS ÷ # of appointment months

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Roles and Responsibilities

Chairs, Deans, Academic Appointment Office, and/or Provost Office:
  • Ensure that faculty salary notifications are provided on an annual basis and as changes occur, indicating the approved institutional base salary.
  • Retain copies of appointment and salary letters or other notification for audit purposes.
Principal Investigators (PIs):
  • Confirm that all requests and charges for direct faculty salary support and cost sharing commitments for sponsored programs are based on the individual’s correct IBS.
Office of Sponsored Programs (OSP)
  • Review and approve proposals (including budgets) for funding from external sponsors.  (Please note that salary estimates are projections based on University guidelines, but that actual IBS will be charged.
  • Answer questions regarding IBS requirements and the correct IBS calculation and administration.
Sponsored Programs Administration (SPA)
  • Review sponsored project expenditures, cost sharing and salary cap charges for accuracy.
  • Answer questions regarding IBS requirements and the correct IBS calculation and administration.

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