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University of Washington

Salary Inflation

Salary Inflation Guidelines

Most grants will ask applicants to supply:

  • the institutional base salary for year 1;
  • the percentage of a person's time that will be devoted to the project;
  • the number of months that the person will be paid;
  • the amount required to cover benefit costs. 

For federal grants, the percentage and number of months are multiplied together and submitted as a single figure called person months (aka calendar months).

The base salary is the amount that a person will be paid at the beginning of the grant. Since grant applications are prepared up to a year in advance of the start date, than the base salary is often the current salary with an estimated inflation rate. The inflation rate for year 1 should be 4% and no more than 4% unless there is a justifiable reason that there will be other increases. Other increases include any raises, promotions, or changes in payscale that will occur during the life of the grant.

If you anticipate that the person will change salary scales altogether, do not inflate their current salary. Instead, use a justifiable substitute for their salary and inflate it 4%. The best substitute can be a salary derived from established salary schedules. Or you can use the salary of another employee who has the anticipated job title and experience.

Every year, the salary should be inflated to account for cost of living increases. The University of Washington will approve up to 4% per year. Most government sponsors, including NIH, will only approve a 3% inflation.  

Salary cap should not be inflated.

The SoN Budget Spreadsheets automatically calculate a 4% increase in year one and a 2% increase in subsequent years.