Chapter 13: Institutional Base Salary (IBS)

13.1 Purpose

The purpose of this policy is to define the treatment and application of Institutional Base Salary (IBS) in the budgeting, charging, and reporting of salaries for individuals working on sponsored projects. This policy ensures compliance with federal regulations, specifically the Office of Management and Budget (OMB) 2 CFR Part 200.430(i), and with sponsor-specific salary policies.

13.2 Policy Statement 

It is the policy of The University of Texas at El Paso (University) to apply IBS consistently in the administration of sponsored projects. This policy applies to all employees involved in externally funded research, teaching, or service activities and ensures that salary charges to sponsored awards are accurate, allowable, and in proportion to the effort contributed. All individuals with effort committed to a sponsored project must follow the guidelines outlined herein.

13.3 IBS Overview

13.3.1 Components and Exclusions of IBS

1. IBS is the total guaranteed annual compensation paid by the University for an individual’s appointment, whether that individual’s time is spent on research, teaching, or other institutional activities.

2. IBS must be used consistently:

1. As the base for calculating effort and salary charges on all sponsored project proposals and awards;
2. In proportion to the percentage of effort committed to the project; and
3. In accordance with sponsor restrictions, including applicable salary caps or time limitations.

3. IBS: 

1. Includes: Regular annual salary from institutional sources
2. Excludes:

1. Fringe benefits
2. Supplemental pay for administrative or special duties (e.g., department chair, center director)
3. Compensation for incidental work
4. One-time honoraria or externally earned income
5. Reimbursed business expenses

13.3.2 Salary CHarges to Sponsored Projects

1. Salary charges for sponsored projects must:

1. Be based on IBS;
2. Reflect only the proportional effort directly committed and expended during the project period; and
3. Comply with effort reporting and certification requirements and sponsor-specific rules.

2. Sponsor-imposed limitations:

1. Sponsor-imposed salary caps (e.g., NIH) limit the amount of IBS that may be directly charged. The excess above the salary cap must be funded by non-sponsored institutional sources.
2. Time-based restrictions (e.g., NSF two-month rule) may further limit compensation on federal grants.

13.3.3 Allowable Changes to IBS

1. IBS cannot be increased simply because salary is being charged to a sponsored project; instead, effort should be reallocated across funding sources as appropriate.

2. Permitted changes to IBS include:

1. Promotion or reclassification of position.
2. Appointment or removal from administrative roles (e.g., chair, program director).
3. Institutionally approved merit, equity (including salary alignment based on position, responsibilities, or market value), or retention adjustments.

13.3.4 Fringe Benefits and Incidental Pay

1. Fringe benefits:

1. Are excluded from IBS.
2. May be charged to sponsored projects if allowable under the award and University policy.

2. Incidental pay:

1. Refers to irregular or infrequent compensation for work outside regular duties (e.g., occasional guest lectures).
2. Is excluded from IBS.

13.3.5 Summer Salary

1. Faculty with nine-month appointments may receive summer salary based on work completed during the summer period. This compensation may be provided for teaching, instructional development, special activities related to academic unit performance, or leadership and service assignments. Research-related summer salary is typically funded through external grants or contracts.
2. The summer salary must be justifiable and generally may not normally exceed one third of the academic salary.
3. Any additional salary payment over and above 100% of base salary must be due to extenuating circumstances and must be approved by the Provost or an authorized designee.
4. Summer salary compensation for Department Chairs is established by the Office of the Provost. Compensation for Associate Deans is determined at the college level.
5. OMB 2 CFR 200.430(i) specifies that: 1) periods outside of the academic year funded by federal agencies may not exceed the faculty member’s base salary rate, and 2) the institution must establish consistent written policies which apply uniformly to all faculty members, not just those working on federal awards.

13.4 Definitions

Compensation: amount of salary that an employee earned for services rendered and paid by the University.

Effort: the proportion of time spent on any University activity expressed as a percentage of time. An employee’s workload will reflect categories of activities expressed as a percentage distribution that must add up to 100% total Effort. The total Effort reported will always equal 100%, even if they are less than 1.0 full-time equivalent appointment. External activities such as consulting are not included.

Effort Reporting: the mechanism used to provide assurance to federal or other external sponsors that salaries charged, or cost shared to sponsored awards are reasonable in relation to the work performed.

Incidental Work: irregular or infrequent compensation for work outside regular duties (e.g., occasional guest lectures).

Institutional Base Salary (IBS): the annual compensation paid by the University for an employee’s appointment, covering teaching, research, and service responsibilities. The IBS excludes bonuses, fringe benefits, supplemental pay, or outside income. The IBS shall be used to compute salaries charged as reimbursable costs or Cost Sharing on sponsored projects unless the Sponsor’s policies further limit salary charges. IBS may not be increased as a result of replacing University salary funds with sponsored project funds.

Salary Cap: the maximum annual salary for the level of Effort that can be charged to a sponsored project by certain federal agencies. It does not limit the amount of compensation paid to an employee but does limit the amount that the funding agency will reimburse for that employee’s Effort on the sponsored project.

Sponsored Project: an externally funded activity that is separately budgeted, accounted for, and governed by specific terms and conditions of the sponsoring organization. A sponsored project may be in the form of grants, contracts, or cooperative agreements for research, instruction, and public service activities.

13.5 References

2 CFR Part 200.430: Compensation – Personal Services

UT System Policy 2.1.6: Institutional Base Salary

13.6 Dates Approved or Updated

May 7, 2026

13.7 Contact Information