Salary at the University of Minnesota

Total Annual Compensation (TAC)

Total Annual Compensation (TAC) is made up of institutional base salary, work outside the primary appointment, and special one-time payments and benefits that an employee receives during a fiscal year. 

Institutional Base Salary (IBS)

Institutional Base Salary (IBS) is the compensation paid by the University of Minnesota to an individual with an appointment in the Faculty or Academic Professional & Administrative (P&A) employee group, whether that individual's time is spent on research, instruction, administration, or service. IBS excludes any income that an individual is permitted to earn outside of the individual's duties for the University of Minnesota (e.g. UMP appointments).

Components of IBS include:

• Regular Salary (REG) for Faculty and P&A
  • BASE = Annual Base Salary – The fixed compensation paid annually to an employee for performing specific job responsibilities. It does not include variable pay such as bonuses or awards.
  • INCR = Increment – Variable from year to year and not part of the tenure-guaranteed base salary. These payments are based on productivity for excellence or volume in teaching and research or administrative duties.
  • FAA = Faculty Administrative Augmentation – A temporary increase to a faculty member’s tenure-guaranteed base salary during the time when the individual occupies one of the following positions: 9340FR – Leader with Faculty Rank, 9360 – Chair with Faculty Rank, 9361 – Head with Faculty Rank, 9362 – Director with Faculty Rank.
  • AAA = Academic Administrative Augmentation – A temporary increase to an employee’s base salary during the time when the individual assumes administrative responsibilities.
  • AUG = Augment – Payment for services that are at a higher level than regular job duties. This code can only be used if employee also has REG pay.
• REGENT = Regents’ Professorship – Compensation for being named a Regents’ Professor, the highest recognition the University gives to a member of its faculty.

Changes in Institutional Base Salary

Generally, IBS may be increased or decreased at the beginning of any fiscal year (e.g., annual pay plans). During a fiscal year, the IBS of an employee generally will not be changed. However, it may be changed during the fiscal year in the following limited circumstances:

• the employee’s formal appointment, and required professional effort, is changed from full-time to part-time, from part-time to full-time, or from one required level of part-time effort to another required level of part-time effort;
• the employee receives an increase or decrease in salary as a result of assuming, or relinquishing, specific academic or administrative duties, e.g. serving as a department chair or program director;
• the employee receives a cost of living or merit salary adjustment as part of a University-wide adjustment of salaries that occurs during a fiscal year; or
• the employee receives a salary increase as a result of a retention or equity adjustment, promotion in rank or position, or change in employment responsibilities.

Salaries Proposed and Charged to Sponsored Projects

Institutional Base Salary for Faculty and P&A employees

In all proposal submissions for funding, and in charging of all salaries to sponsored projects, the IBS is prorated based on the employee’s percent time appointment and expected percentage of time to be charged to the project.

Example: IBS rate is $100,000 for a 12-month full-time appointment, appointment is 75% time and the expected project-devoted percentage of time is 25%:

• $100,000 IBS X  75% appointment = $75,000
• $75,000 X 25% expected project percentage = $18,750

Periods outside the academic year (e.g. summer appointments)

Charges for work performed on awards during periods not included in the base appointment may be budgeted in proposals and charged to sponsored projects at a rate that is consistent with IBS. When determining the actual costs associated with the expected percentage of time to be charged to a project, only the employee’s IBS is considered.

EXAMPLE: Professor X holds a 9-month faculty appointment with an IBS of $90,000. Professor X would like to budget 1.5 months of summer salary on a proposal.

• $90,000 IBS / 9 months = $10,000 monthly rate of pay
• $10,000 x 1.5 months = $15,000 during the summer period

The period outside the academic year when added to the academic year appointment may not exceed a full-time, 12-month equivalent.

Salary rates for non-academic employees

Salaries for Civil Service exempt, non-exempt and other hourly employees may be budgeted and charged to sponsored projects at rates that are consistent with University policies covering payment of these individuals (i.e. policies specific to each employee group covering payment of overtime, holiday pay, etc.). In all proposal submissions for funding, and in charging of all salaries to sponsored projects, the IBS is prorated based on the employee’s percent time appointment and expected percentage of time to be charged to the project.

Example: IBS rate is $100,000 for a 12-month full-time appointment, appointment is 75% time and the expected project-devoted percentage of time is 25%:

• $100,000 IBS X 75% appointment = $75,000
• $75,000 X 25% expected project percentage = $18,750

Extra Service Pay

Extra Service Pay normally represents overload compensation and is subject to institutional compensation policies for services above and beyond IBS. It is not normally allowed to be charged to sponsored projects, except under the following limited circumstance:

• Overload Compensation for Intra-University Consulting

Intra-Institution of Higher Education (IHE) consulting by faculty is assumed to be undertaken as a University obligation requiring no compensation in addition to IBS. However, in unusual cases where intra-University consultation is across departmental lines or involves a separate or remote operation, and the work performed by the faculty member is in addition to the individual's regular responsibilities, any charges for such work representing additional compensation above IBS are allowable provided that such consulting arrangements are specifically provided for in the sponsored award or approved in writing by the awarding agency.

Salaries used in Effort Reporting

The Effort Certification and Reporting Tool (ECRT) includes all earnings codes representing IBS, periods outside the academic year, and extra service pay; as well as the earnings codes representing salaries and wages paid to non-academic employees (see Earning Codes Included in ECRT).

What salary components are not included in Proposals and/or ECRT

The following are examples of paid compensation that are not included in IBS and, therefore, cannot be included in sponsored proposals nor charged to sponsored projects and are not included in effort reporting:

• payments under performance incentive plans;
• non-service or one time payroll items, such as awards; and
• compensation for patient care activities provided through the University of Minnesota Physician (UMP) practice plan that are paid through the University’s common paymaster agreement.

Related Information

• Administrative Policy: Effort Certification
• Administrative Procedure: Charging Direct Costs to Sponsored Projects
• Earnings Codes and Tax Information
• Effort Certification Earnings Codes (Earnings Codes Included in ECRT 2/2/16 under the “Other Job Aids and Useful Links” section)