The Salary Savings Award program is designed to recognize the success of individual faculty in contributing to the University’s research program by competitively obtaining extramural funding and applying unsponsored research effort to sponsored projects. The IUB salary savings award process is administered and funded by the salary-disbursing units (i.e., the unit providing the faculty member’s base salary) to reward and incentivize extramurally sponsored research activity in all departments and centers on the Indiana University, Bloomington campus.
To fund the Award, salary-disbursing units will use salary savings funds generated through shifting of general fund salary costs to extramural grants and contracts. Salary savings funds are defined as funds that are generated by moving faculty salary expenses normally paid from general operating funds to extramural grants and contracts. In allocating salary to extramural grants for contracts, faculty must remain compliant with University policies, state and federal laws and regulations, and terms of sponsors' agreements. Salary savings funds for this Award cannot be generated from salary amounts covered by fellowships or by endowment or gift accounts.
A. Eligibility for Award
All full-time faculty on regular or special title series (e.g., tenure-track appointments, non-tenure-track clinical, lecturer/teaching, or professor of practice) excluding visiting/acting/adjunct and research appointments (e.g., research professor or research scientist), are eligible for the Award. Faculty with research appointments are ineligible, except with approval, because salary coverage using grants and contracts is often an explicit expectation of employment solely in the service of research (i.e., these are “soft-funded” positions). Exceptions for faculty with research appointments may be granted with approval by the dean or their delegate when the faculty member’s salary is typically paid using general operating funds rather than extramural grants and contracts (i.e., “hard-funded” positions).
Awards will incorporate all extramural research funds from which the faculty member’s salary support was garnered for research effort regardless of the indirect cost rate (i.e., facilities and administration) on the grant or contract. Salary savings generated by fellowships are not eligible for this Award but are incentivized through the Prestigious Fellowships Award (Section IV).
B. Determination of Award Amount
The Salary Savings Award amount is calculated as a percentage of the research effort salary converted from general operating funds to extramural award(s), within the limits outlined here. The percentage applied to the Award calculation is dependent on standard course load (i.e., not inclusive of course releases or waivers for special circumstances) to preserve equity in incentives across disciplines, departments, and schools. Specifically, the formula is:
Base Annual Salary x Percentage of Research Effort Covered x 30%
The following example calculations assume that a standard FTE for tenure track faculty follows the 40/40/20 distribution, where research effort is 40%, teaching effort is 40% (10% per course), and service effort is 20%. For faculty with non-standard teaching loads, research effort is calculated at 50% for faculty expected to teach three courses, 60% for faculty expected to teach two courses, and 70% for faculty expected to teach one course. For example, the award for a faculty member making $100,000 with a standard four-course teaching load who covers 50% of their research effort (i.e., 20% of their total salary) would be base annual salary x .50 x .30 = $15,000. The award for a faculty member with a two-course teaching load who covers 33% of their research effort (i.e., 20% of their total salary) would be base annual salary x .33 x .30 = $9,900. Units that have approval for teaching, research, and service efforts that are different from the standard 40/40/20 distribution may use their local research effort for this calculation.
Calculation of the award amount excludes cost share dollars, including any salary over the salary cap implemented by the granting agency. In other words, if a faculty member’s base annual salary is above the salary cap, the salary is set to the cap for the purposes of determining the award amount using the above formula. For example, the FY24 NIH salary cap is $221,900. As such, the base annual salary used in the above calculation would be $221,900 for any faculty covering salary with NIH funds and making more than the cap.
The maximum award per faculty member is $50,000 per year. Any additional salary savings above the Award payment will be returned to the salary-disbursing unit. If there are multiple salary-disbursing units, salary savings will be returned according to the salary split across units (e.g., 50% to each unit if 50/50 joint appointment).
If a faculty member “buys out” of teaching, the cost is a fixed % of the base annual salary per course and these salary savings will be returned to the salary-disbursing unit. Any excess salary that charges to the grant above the cost of course buyouts is eligible for a Salary Savings Award and is calculated at 30% of the amount of research FTE covered by grants and contracts (i.e., converting unsponsored research effort to sponsored research effort). Course waivers or releases for special circumstances (e.g., as part of start-up packages) are not factored into the Award calculation. Course buy-outs may be used in combination with the Salary Savings Award in accordance with Award guidelines. For example, the award for a faculty member making $100,000 with a standard four-course teaching load who “buys out” a course for 10% of their salary and covers an additional 25% of their research effort (i.e., a total of 20% of their salary) would be base annual salary x .25 x .30 = $7,500 in addition to the course release.
This Award applies to faculty with 10-month and 12-month appointments. However, grant charges for summer funding for faculty on a 10-month appointment are not eligible for the Award. Rather, the Award amount is calculated based on the academic year salary and research effort.
This award is voluntary and must be requested through the Office of the Vice Provost for Faculty and Academic Affairs. Requests and FTE updates must be submitted by May 1st to be considered for a Salary Savings Award payment. The award level is contingent on the financial status of the campus and campus policies and approvals.
C. Award Allocation
Salary savings will be used to pay an award as research discretionary funds to eligible researchers. Research discretionary funds earned through the Salary Savings Award are subject to the same conditions and restrictions as the Indirect Cost Recovery Sharing program.
If a faculty member has at least $10,000 in research discretionary funds in their account, they may request to take the Salary Savings Award as supplemental salary. The faculty member must submit a formal request with a narrative justification indicating why they do not need research discretionary funds and prefer to take the award as supplemental salary. These requests must be approved by the faculty member’s department chair and dean. The Award, if approved to be taken as a salary supplement, will be subject to standard state and federal tax withholding.
To be eligible for award payout, the calculated award must be at least $1,000 for the individual faculty member. In addition, the faculty member must still be employed at the University on the date of the distribution. The awards will be paid out in August after the end of the fiscal year as a payroll payment to the faculty member.
Awards may be adjusted or withheld on the basis of the following conditions:
- An annual performance evaluation with poor performance concerns
- Over expenditure of grants
- Sabbatical
- Determination of research or other misconduct
- Determination of non-compliance or inappropriate use of funds
