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Budget Preparation

Your budget is a financial proposal that reflects the work proposed. It outlines the expected project costs in detail, and should mirror the project description. A budget is presented as a categorical list of anticipated project costs that represent the researcher's best estimate of the funds needed to support the proposed work. The term “best estimate” is important here. You will be held to using the costs detailed in your budget, so make sure you’ve correctly estimated what you will need to complete the project.

Reviewers want to know how reasonable the cost of your project is. They will ask themselves whether you are over or underestimating your expenses. A careful review of the budget lets the reviewer know that you're not asking for too much or too little, but rather, just enough funding.

A UCSB Detailed Budget should be prepared for each proposal. This will assist in the completion of any sponsor budget forms and the budget justifcaiton, as well as assist with sponsor requests for additional details about how you generated your overall figure, or where the money will be going. Remember, all budgets are to be prepared in accordance with the Office of Management and Budget (OMB) Uniform Guidance (the UG) and the UC Santa Barbara Departmental Costing Guidelines (the Department Costing Guidelines are currently in draft form and have not yet been approved by Extramural Funds Accounting).”

For proposals to State of California agencies, in addition to the information contained below, please see our State of California Proposal Guidance page for forms, instructions and indirect cost information specific to State proposals.

Preparing Your Budget

Direct Costs

Indirect Costs (IDC) or Facilities and Administration (F&A) Costs

Estimating Project Costs

Project Contributions (Cost Share)

Budget Justification or Narrative

Helpful Budget Links

Direct Costs

Direct Costs include salaries and wages, fringe benefits (including GSR tuition, fees, and health insurance), equipment, travel, participant support, sub-awards and multi-campus agremeents, and other direct costs.

Salaries and Wages

The budget category Salaries and Wages is designed to account for UCSB employees only. Non-UCSB employees will be listed on their approperiate subaward or MCA budget, as consultant costs, or as contracts for services.

In the Salaries and Wages category, you should include the individual's name, University payroll title, annual or monthly salary, number of months or percentage of time on project, and the total salary requested for each person listed. Always note that the summer salary for faculty is "1/9 annual salary," as many sponsors question how summer salary is calculated.

If you know the specific person who will be working on a project, you should use their actual salary. When an actual salary rate is used, it must be must be indicated as such in the proposal budget. For academic appointments, if an individual's salary is above-scale or off-scale, indicate such on the budget. Remember: Off-scale means appointed at a specific on-scale level, but the salary is above that level, while above-scale means appointed at a salary that is above the highest possible level for that title.

If an individual is not yet identified, list as "TBN" (to be named) with the appropriate salary from the approved salary scales. Remember to consult the bargaining unit contract for covered academic and staff tittles.

Remember that departmenal approval is required for any faculty release time included in a proposal budget.

Clerical or administrative salaries and wages should normally be treated as indirect costs.  However, such costs are allowable as direct costs if the four criteria in the UG § 200.413(c) are satisfied. To be included, such costs must be specifically justified in the proposal and in accordance with the Office of Management and Budget (OMB) Uniform Guidance (the UG).

Escalation Rates for Salaries and Wages (updated 10/21/2015)

Projected merits/promotions should be factored in for all titles.

Fringe Benefits

Fringe Benefit rates are listed on the proposal budget as a set percent of salary. Fringe benefits must be budgeted to the same funding source as the corresponding salary. Please refer to the UCSB Projected Fringe Benefits Rates chart for the correct benefit rates.

To determine whether faculty compensation is above or below the FICA ceiling, take the annual, 9 month salary, divide by 12, then multiply by 7 (January 1 - July 1 paychecks).

Actual benefit costs may be used for an existing academic or staff employee. If you use an individual's actual fringe benefit rate, the employee's name with the word "actual" next to the name should be listed on your budget. Please note that fringe benefit percentages for some academic titles change in the summer months.

UC Retirement Plan (UCRP) Contributions

At their September 2010 meeting, the University of California Board of Regents voted unanimously to increase the amount UC and its employees contribute to the University pension plan. Beginning in July 2011, employee members of the UC Retirement Plan (UCRP) began contributing a percentage of salary into the plan; UC also contributed a percentage to the plan. The amount of contribution has increased over a period of time and will continue to increase every July, as follows:

FY 2015 (Effective 7/1/2014) 14.72%
FY 2016 (Effective 7/1/2015) 14.80%
FY 2017 (Effective 7/1/2016) 14.90%
FY 2018 (Effective 7/1/2017) 15.15%
FY 2019 (Effective 7/1/2018 and until amended) 15.35%

To maintain consistency with University accounting practices, these rates should be added to the existing benefit rate for eligible staff and academic personnel. Please note that these contribution rates do not apply to faculty summer salary, and that they are subject to collective bargaining for represented employees. If a budget proposal covers two University fiscal years, a combination of the two benefit rates should be used in the proposal.

The UCRP rate do not apply to 9-month faculty appointees, those in Post Doctoral Titles, and students in any title. Refer to the UCSB Projected Fringe Benefits Rates chart for additional guidance.

A statement similar to the one that follows should be included in the budget justification to address the addition of estimated UCRP contributions; "The fringe benefit rate includes an increase of ___% for restarting the employer contribution to the University of California Retirement Program (UCRP), effective July 1, 2009 for eligible employees and is applicable to all university fund sources."

Graduate Student Tuition, Fees, and Health Insurance

Graduate students employed by the University in eligible classifications receive partial or full tuition and fee remission, depending on the percentage of time appointment, from the same fund that pays their salaries. In cases when an eligible graduate student is paid from more than one fund source, the cost of remission should be prorated. Graduate students employed in the title classification Graduate Student Researcher (GSR) are among those eligible for remission. Questions regarding eligibility of particular students should be directed to the UCSB Graduate Division.

Please refer to the UCSB Office of the Registrar's Summary of Quarterly Fees and Expenses for the current tuition, fee, and health insurance rates.

Indicate on the budget if tuition, fees and insurance are for an in-state or out-of-state Graduate Student Researcher (GSR).

GSR approintments up to 24% time are not eligible for remission. However, if a GSR has an appointment that is less than full time in your department/unit, make sure they do not have an additional appointment, as eligibility for remission is based on the total percent of all appointments combined on campus.

Partial Remission

GSRs employed between 25% and 34% time (all GSR appointments combined) qualify for partial remission. This includes payment of 100% of the university's mandatory fees: Student Services Fee; Tuition, All Students; and Non-Resident Tuition, Supplemental where approperiate. It also includes payment of Health Insurance. However, partial remission does not currently include the payment of UCSB Campus Based Fees.

Full Remission

GSRs employed at least 35% time or at least 140 hours of a three month quarter (all GSR appointments combined) qualify for full fee and tuition remission. This includes payment of 100% of the university's fees: Student Services Fee; Tuition, All Students; UCSB Campus Based Fees, and Health Insurance. It also includes payment of Non-Resident Tuition, Supplemental for international students, and non-resident domestic students during their first year only.

Non-Resident GSRs who have advanced to candidacy are eligible for a 100% reduction in supplemental tuition for a maximum of three years after the advance to candidacy.

Tuition, Fees, and Health Insurance Escalation Rates (updated 8/2015)

2016-2017 * 2017-2018 2018-2019 2019-2020 2020-2021
1% 3.5% 3.5% 3.5% 3.5%



*While Resident Tuition is not projected to increase in 2016-2017, the Student Service and Campus-based fees are projected to increase.

Sponsored Projects staff use this unofficial GSR Tuition/Fees and GSHIP Projections chart as a tool when reviewing proposals. It may be used by departments to assist in determining the appropriate rates when preparing proposal budgets. It is not intended to replace use of the official rates found on the UCSB Office of the Registrar's Summary of Quarterly Fees and Expenses website.


The University defines equipment as articles of non-expendable tangible personal property having a useful life of more than one year, and an acquisition cost of $5,000 or more per unit. Sometimes an agency will have a higher or lower dollar value than UCSB. In this case, UCSB's dollar value takes precedent.

Tax, shipping, and any transit costs should be factored into the cost of the equipment. If the quote is from an out-of-state or foreign supplier California Use Tax should be factored into the cost as well. One exception: Sales tax is not paid on government owned equipment. If the guidelines of a proposal state that any equipment purchased will vest in the government, do not add in sales tax.

Fabrications are generally treated like equipment and excluded from indirect costs under MTDC calculation. However, if an item is fabricated and title title is not retained by the UCSB, all costs of its fabrication are subject to indirect costs. Fabrication costs may include associated labor. Please consult with UCSB Equipment Management to confirm that all anticipated fabrication costs are correctly categorized as equipment.


Travel should be broken down into domestic and foreign categories, and as much detail as possible should be provided. Include travel destinations, number of people traveling, number of days traveling, ground and/or air transportation costs, lodging and substanance or per diem, etc. Remember to always check the sponsor guidelines to make sure foreign travel is allowed before including it in a proposal budget.

All travel funded directly or indirectly by the Federal Government must comply with the Fly America Act.

See the UCSB Business & Financial Services travel webpage and the UCOP Financial Services & Controls travel policy webpage for additional guidance, including per diems rates and mileage expenses.

If the project involves international travel, we recommend the travelers review the UC Ethics, Compliance and Audit Services' information on international travel, hand-carrying items abroad and export control laws & regulations prior to traveling abroad. Additional export control information is available on the UCSB Research Integrity website.

Participant Support

Per the Uniform Guidance, participant support costs means direct costs for items such as stipends or subsistence allowances, travel allowances, and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with conferences, or training projects.

A stipend is defined as a fixed sum of money paid to a participant. Stipends are not paid in compensation of work performed.

Subawards and Multiple-Campus Awards (MCAs)

The total amount of each subaward or Multiple-Campus Award (MCA) should be listed as a seperate line item on the UCSB Detailed Budget. An authorized scope of work, budget, and budget justification must be submitted for each subaward or MCA. A Sub-recipeint Commitment Form or MCA Commitment Form, signed by an authorized official of the recipient entity, must be provided to Sponsored Projects prior to submission of the proposal. See UCSB Office of Research - Subawards page for details.

Indirect costs are assessed on the first $25,000 of each individual subaward for all New and Renewal proposals (effective July 1, 2009). If the first budget period is less than $25,000, remember to add the remaining amount to equal the $25,000 in the remaining budget period(s).

If UCSB is submitting a proposal that includes an MCA, no indirect costs are assessed on any part of the MCA amount. See Indirect Costs (IDC) or Facilities and Administration (F&A) Costs for additional guidance.

If unsure if the other entity's costs should be budgeted as a subaward or a service agreement (in Other Direct Costs), please review the Subaward Determination Tip Sheet. If still unsure after reviewing the tip sheet, contact your Sponsored Projects Team.

Other Direct Costs

Other Direct Costs include Materials and Supplies, Publication Costs, Consultant Costs and Contracts for Services, UCSB Campus Recharges, and Other.

Materials and Supplies

Material and supply costs are defined as items that cost less than $5,000. They must be reasonable and directly allocable to the supported activity, and should be listed on the budget wtih information detailing quanitiy, unit price, and a description of the item. Office supplies, postage, copy charges and local phone calls are examples of costs not normally allowed as direct costs. To be included, such costs must be significantly above what is normally covered by Indirect Costs (IDC) or Facilities and Administration (F&A) Costs, and must be specifically justified in the proposal and appropriate to the project.

Hazardous waste disposal costs are not allowable as a direct cost.

Publication Costs

You may include the costs associated with the dissemination of research findings from the proposed research. Publication costs typically include page charges for professional publications.

Consultant Costs & Contracts for Services

Consultant Costs generally may only be paid to individuals not employed by UC campuses or labs. The consultant should provide special knowledge that is needed for the project. Include the same information provided for UCSB project personnel (name, title, etc) and be specific about daily rate and amount of days for which they will be paid.

Contracts for Services should be included in the budget as a line item. The total amount of the contract is accessed the appropriate IDC rate.

If unsure if the other entity's costs should be budgeted as a consulting/service agreement or as a subaward, please review the Subaward Determination Tip Sheet. If still unsure after reviewing the tip sheet, contact your Sponsored Projects Team.

UCSB Campus Recharges

Intercampus recharges for research related goods and services such as facilty or equipment usage, university automobile rentals, or specialized technical services may be included in a project budget. All recharges must be directly allocable to the project, and should be estimated and escalted based on the Estimating Project Costs guidance found below. See also the UCSB Budget & Planning Income & Recharge webpage for additional information on recharge policies and procedures at UCSB.

Indirect Costs (IDC) or Facilities and Administration (F&A) Costs

Indirect Costs (IDC) a.k.a. Facilities and Administrative (F&A) Costs represent those expenses that cannot be easily identified to any specific project but are incurred for common or joint objectives. They include operation and maintenance of facilities, including building depreciation, library expenses, space, utilities, payroll, accounting, and other services. The indirect cost rate is determined by the type of project i.e. research, instruction, or other. The rate is also determined by whether the project is performed on-campus or off-campus. Refer to An Introduction to Indirect Costs at UC Santa Barbara for additional information.

UCSB's Federally Negoitationed IDC or F&A Rate Agreement

UCSB has pre-determined IDC rates that have been negotiatied with the Department of Health & Human Services (DHHS). See the negotiated rate agreement for UCSB.

The applicable IDC rate is determined by the type of project (i.e. Research, Instruction, Other Sponsored Activities, etc.) and by whether the project is performed on-campus or off-campus. Refer to the negotiated rate agreement for UCSB and the UCOP Contract & Grant Manual Chapter 8, or contact your Sponsored Projects Team for assistance determining the correct IDC rate for your project.

UCSB's indirect cost is assessed on Modified Total Direct Costs (MTDC). The MTDC base consists of salaries and wages, fringe benefits, materials, supplies, services, travel, and subcontracts (up to the first $25K of each). The costs of equipment, capital expenditures, graduate student remission (including tuition, fees, and health insurance), rental costs of off-site facilities, scholarships, fellowships, the portion of each subcontract in excess of $25K, and the total of each MCA is excluded from the MTDC base.

A DHHS agreement statement should always be included at the end of the detailed budget to let agencies know which authority has negotiated our IDC rate agreement; "This is the DHHS negotiated, predetermined, on-campus rate for Research Projects covering the period July 1, 2014 through June 30, 2015. The rate thereafter is provisional."

UCOP Approved IDC Exceptions

Proposals must include the negotiated rate unless the UC Office of the President has approved an IDC Exception to our federally negoitated rate and base. Using written documentation from the sponsor of an alternate IDC rate or IDC base, Sponsored Projects will request an IDC Exception from UCOP. Contact your Sponsored Project Analyst for assistance preparing and documenting an alternate IDC rate or base.

See also Calculating Indirect Costs with a Total Costs Base for assistance working with a sponsor imposed Total Costs IDC base.

IDC for Proposals to State of California Agencies

Proposals to State of California agencies should apply the appropriate IDC rate from UCSB's federally negotiated rate agreement if the funds are ultimately flowing down from a federal agency. For proposals funded with state funds (and no federal funding), please apply the appropriate indirect cost rate in accordance with the guidance on our State of California Proposal Guidance page.

Estimating Project Costs

Once you know your direct cost budget categories, you will need to identify and project the costs for a sponsored project using generally accepted cost estimation methods. For categories other than Salaries and Wages and Graduate Student Tuition, Fees, and Health Insurance, you will need to estimate your costs. There are multiple accepted cost estimation strategies:

You may utilize methods other than these to estimate your costs. However, you must ensure that your process is logical, you can explain it to someone else, and you are able to document how you obtained your numbers.

Escalating Costs

When you estimate your costs, you should remember that costs increase over time. Because of this, we recommend that you include a modest escalation in the estimate of costs for direct charges. Escalating costs is consistent with the University's cost principles, and with the University's policy of recovering all costs of conducting sponsored projects. Escalation helps to ensure that your project receives adequate funding. You should use an escalation rate of 3 to 5% for most direct costs. There are two exceptions to this - Salaries and Wages, and Graduate Student Tuition, Fees, and Health Insuranace should be escalated in accordance with those rates indicated in these sections.

Documenting Costs

Once you've estimated your direct costs, you will also need to make sure you keep detailed documentation. Documentation supports how the costs were estimated and the reasons why costs were proposed. This is our proof that we are not just making up all of the numbers.

You can use any of the materials you used for your cost estimation as documentation. These could be things like payroll records, published merit & range increases, catalogs, on-line or other, vendor quotes, proposals, or documentation of historical costs for like projects.

If you are using web-based information as your documentation, you should save either a printed copy or PDF version of the page, not just the link. Auditors will need to see the information you used when you wrote your proposal budget, and the website will most likely update the information, or may not be available at the time of an audit.

Project Contributions

Project Contributions should only be included in a proposal when required by a sponsor as a condition of applying for an award. If project contributions are included you will need to have commitment memos for each source of funding. These commitment memos must be signed by the individual responsible for each funding source identified in your proposal as project contributions. Refer to the UCSB Office of Research - Project Contributions page for more information about requesting cost sharing.

Budget Justification (Budget Narrative)

The Budget Justification (aka Budget Narrative) provides the rationale for proposed expenditures. Follow sponsor guidelines to prepare the budget justification for submission to the sponsor. If sufficient detail is not provided on the UCSB detailed budget, UCSB may require additional justification.

Helpful Budget Links

Budget Allocation

Detailed Budget (4-year) Updated

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Updated: December 18, 2015.