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Loyola University Chicago

Office of Research Services

Faculty Salary Charges on Externally Funded Projects

These guidelines pertain to the salaries of full-time faculty at the Lakeside campuses that are funded by extramural sources. In these guidelines, grants will refer to any form of extramural support (grant, contract, fellowship, etc.). The guidelines cover three types of salary: summer salary, academic salary, and incidental salary.

Academic salaries can be fully or partially funded by external sponsors depending on the policies of the sponsor and those of the faculty's academic unit and these guidelines. The University encourages faculty to pursue funding which would support their salary. No more than twelve months of total salary support (academic plus summer) will be approved in a twelve month period. It is the responsibility of the PI to know and follow sponsor's policies pertaining to the payment of academic salary and to initiate the process to pay salaries from external awards.

This section applies when a grant will pay a portion of the institutional base salary of a faculty member working on a particular research project during the academic year.  “Institutional base salary” (or IBS)  is defined as the base salary (academic year or year-round) plus major or minor administrative stipends, if any, paid to the faculty member, but does not include summer or incidental salary (sections 2 and 3 below).

For faculty charging academic year effort to a grant during a given period, the amount budgeted should be the result of multiplying the faculty member’s IBS by the percent of effort for that period.

If the faculty member is seeking a course buy out, the rule of thumb (pursuant to guidance we’ve received from the provost’s office) is that 15% of IBS and associated fringe benefits must be budgeted on the grant for each course buy out, subject to applicable college/school guidelines.

For faculty with academic contracts of nine months of salary, grant funds may be used to pay for up to three months of summer salary (June, July and August). No more than twelve months of total salary support (academic plus summer salary) will be approved in a twelve month period. Sponsor policies and any policies related to academic units will determine the number of months of summer salary that can be funded (e.g., some granting agencies only allow two months of summer salary support). PIs are responsible for knowing and following sponsor's policies pertaining to summer salary and for initiating the process to pay salaries from external awards.

A request for summer salary indicates a commitment to put the comparable effort on a particular project during the summer, not the academic year.

Consistent with sponsor requirements, salary commitments for sponsored projects conducted in June, July or August (i.e., outside the academic year), may be budgeted on a grant per the following guidelines: 

a)For 9 month faculty (including those with minor administrative appointments), the maximum amount of summer salary that can be budgeted on a grant is 3/9ths of the IBS, if the sponsor allows, not to exceed 1/9th in any one summer month.


Dr. James Cameron – 9 mo. salary = $70,000

Minor admin. appointment = $3,000

Maximum allowed is 3/9ths of IBS, or

            (73,000/9) x 3 = $24,333

HOWEVER: This cannot be paid out in one summer month. It needs to be divided by 3 (equating to 1/9th), or $8,811 maximum for each summer month.  The College/School’s Budget Manager will need to make sure of this when preparing the PAF.

b) For faculty with a major administrative appointment, such as Dean, Associate Dean, Department Chair, or Director of a major center, the maximum allowed, if the sponsor allows, is 1/9th of the IBS, not to exceed 1/27th in any one summer month (see http://www.luc.edu/academicaffairs/pdfs/grant_based_salary_luc__faculty.pdf).


Dr. Martin Scorsese – 9 mo. salary = $70,000

12 mo. admin appointment = $20,000

Maximum allowed is 1/9th of sum of both salaries, or

            (70,000+20,000) / 9 = $10,000

HOWEVER: This cannot be paid out in one summer month. It needs to be divided by 3 (equating to 1/27th), or $3,333 maximum for each summer month.  The College/School’s Budget Manager will need to make sure of this when preparing the PAF.

c) 12 month faculty (including endowed chairs) are not eligible to earn summer salary.

NOTE: The examples in (a) and (b) show maximum amounts that can be charged.  Actual grant charges can be less if the level of effort is correspondingly less than the maximum allowed.

In rare cases, LUC faculty (full or part-time) may be paid in addition to their regular salary for contributing to a grant-based research project, per the following restrictions: 

a) Incidental/supplemental  pay must have prior approval by the faculty member’s dean or academic supervisor.  Deans or academic supervisors must take into consideration whether the additional work compromises a faculty member’s ability to complete his/her normal university work. Incidental pay from federal grants must have prior sponsor approval.

b) The work is outside the scope of their normal duties (e.g., instructional faculty lends his or her particular expertise on a research project).

c) Work done on the grant does not interfere with normal duties.

d) Such incidental pay is not considered part of the IBS for purposes of calculating academic year or summer salary amounts.

e) The faculty member to be compensated must have expertise unique to the project and the request for supplemental pay rather than normal workload must be justified.

f) In no event will an overload payment from grants exceed twenty percent (20%) of the full-time faculty member’s IBS, pro-rated over the member’s appointment period.  For example, if a 9-month appointee’s IBS is $75,000 and the grant period is 6 months of the 9-month period, then the maximum allowed overload amount is 6/9 * 75,000 * 20%, or $10,000.

All faculty salaries must include fringe benefits according to the fringe benefit rates in the agreement with DHHS. This information is available here.

Please consult with the Research Administrator assigned to your School/Department in the Office of Research Services for other relevant policy issues regarding grant salary payments. Exceptions to the grant salary guidelines outlined herein may be approved only by the Provost.

Academic year effort may be counted as a cost share commitment with prior approval from your Chair/Dean. Academic year cost-shared salary should be calculated using the same basis as academic year salary charged to a sponsor. An accounting unit (AU) number showing the source of the cost share must be submitted to ORS, via the PTAP, at the time of proposal preparation.

If no pay is received during a summer pay period, then “volunteer” effort by a faculty member on a grant as third-party cost share is permissible. This cost share must be reported by the faculty member submitting a letter to SPA documenting the time spent on the project, with the value calculated as per section (2) above. The letter should be signed and dated by the faculty member and countersigned by the PI of the grant if different.

[the following guidance is provided by the Division of Academic Affairs]

If you are listed as Principal Investigator (PI) on a new grant award from which you will pay yourself or others, you must first meet with your Dean to review course reductions, budgets, salaries, etc. The next step is to coordinate with your College Budget Manager to initiate the electronic Payroll Authorization, an online approval process (Faculty Information System) authorizing grant salary charges. The Budget Manager will submit the form to the PI for sign off, followed by Chair/Dean, and then to Faculty Administration for payroll processing. Please note that because a PI must sign off on all grant salary charges, the responsibility of meeting with the Dean (and College Budget Manager) may not be delegated to anyone else. Also, if a PI recruits another full-time faculty member(s) to work on a grant, your College Budget Manager will coordinate the appropriate payroll charges to the grant.


Office of Research Services
6439 N. Sheridan Road, Suite 400 · Chicago, IL 60626-5309
Phone: 773.508.2471 · Fax: 773.508.8942 · E-mail:ors@luc.edu

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