Training Module 9: Calculating Salary, Fringe & Indirect: Budget Modifications Connecticut Advanced Manufacturing Initiative (CAMI) March 15, 2016 Michael Swahn, CAMI Project Assistant This program is (funded by or in-part by) a $15,000,000 Trade Adjustment Assistance Community College and Career Training (TAACCCT) grant from the U.S. Department of Labor, Employment and Training Administration. This Program is an equal opportunity employer/ program. Auxiliary aids and services are available upon request to individuals with disabilities. This work is licensed under the Creative Commons Attribution 4.0 International License. To view a copy of this license, visit or send a letter to Creative Commons, PO Box 1866, Mountain View, CA 94042, USA.

There are two different scenarios to consider… Introduction When you are moving any amount of salary, remember there is associated fringe and indirect costs tied directly to that amount. Make sure to use the fringe and indirect percentages that are listed in your specific grant budget The examples in this module are meant to serve as a tool to help calculate moving salary, associated fringe, and indirect costs. There are two different scenarios to consider…

Scenario #1 You only know the salary, you want to move to another line and you’re trying to determine how that will impact your fringe and indirect lines Example: You have determined that you want to increase your contractual line and you’d like to start by moving $10,000 out of your salary line; however, you must also move the associated fringe and indirect. STEP 1- Description: Start by determining how much you would like to move out of your salary line Example: Business & Industry Instructor $10,000 STEP 2- Description: Next you will need to reduce the fringe line based on the salary in Step 1 ($10,000) Example: $10,000 x 68% = $6,800 When performing this calculation, make sure to use the fringe and indirect percentages that are listed in your specific grant budget.

Scenario #1 Continued STEP 3- Description: Next you will need to reduce the indirect line based on the salary in Step 1 ($10,000) Example: $10,000 x 65% = $6,500 Action: When you are completing your budget modification, you will reduce your salary line by $10,000, fringe line by $6,800 and indirect line by $6,500. Finally, you will increase your contractual line by $23,300. Your total grant budget will remain the same.

Scenario #2 You know a total amount (salary, fringe and indirect) or target number that you want to move and you’re trying to determine how much you will need to reduce each line. Example: You have determined that you want to increase your contractual line by a total of $10,000. You would like to use your salary line and the associated fringe and indirect lines. When performing this calculation, make sure to use the fringe and indirect percentages that are listed in your specific grant budget.

Scenario #2 Continued STEP 1- Description: Start by calculating the amount of money you will need to reduce your salary line. You will need to know your target number ($10,000), fringe rate (68%) and indirect cost rate (65%). STEP 2- Description: Next you will need to calculate how much you will need to reduce the fringe line. Use the salary from Step 1 ($4,292) and your fringe rate (68%). STEP 3- Description: Next you will calculate how much you will need to reduce the indirect line. Use the salary from Step 1 ($4,292) and your indirect cost rate (65%). Action: When you are completing your budget modification, you will reduce your salary line by $4,292, your fringe line by $2,918 and indirect line by $2,790. Finally, you will increase your contractual line by $10,000. Your total grant budget will remain the same.