The National Science Foundation (NSF) has a regulation that limits the amount of compensation that “senior personnel” can propose on NSF Awards.  This webpage explains the NSF regulation, UW’s interpretation of the regulation, and UW tools to assist departments in ensuring compliance.

Additional information on the NSF 2-Month Rule can be found on the Office of Research website.


NSF Regulation

NSF regulations can be found in the NSF Proposal and Award Policy and Procedure Guide (PAPPG).

 Relevant part of the regulation follows with key terms in bold:

“….NSF limits the salary compensation requested in the proposal budget for senior personnel to no more than two months of their regular salary in any one year.

It is the organization's responsibility to define and consistently apply the term "year", and to specify this definition in the budget justification.

This limit includes salary compensation received from all NSF-funded grants.

If anticipated, any compensation for such personnel in excess of two months must be disclosed in the proposal budget, justified in the budget justification, and must be specifically approved by NSF in the award notice budget.

..…a grantee can internally approve an increase or decrease in person months devoted to the project after an award is made, even if doing so results in salary support for senior personnel exceeding the two-month salary policy. No prior approval from NSF is necessary as long as that change would not cause the objectives or scope of the project to change. NSF prior approval is necessary if the objectives or scope of the project change.”

Key Term Definitions

The terms in bold above need to be defined in order to understand this regulation.  The UW’s definition of these terms is as follows:

Salary:  Per 2 CFR 200.430 (h)(2) Salary is an allowable cost at the Institutional Base Salary (IBS) rate.  The salary components that the UW includes in IBS can be located on the MAA webpage.   

Senior Personnel:  NSF’s definition of Senior Personnel, as found in the PAPPG, is:

      “…individual(s) designated by the proposer, and approved by NSF, who will be responsible for the scientific or technical direction of the project.” 

These individuals are listed by name as being responsible on the NSF Award.  NSF’s format for how these Senior Personnel are listed has changed, and will continue to change over time but typically the named individual(s) appear at the beginning of the Award document.  Here are two current examples:

Example 1:

“The project, entitled “Science I” is under the direction of John Doe and Jane Doe.”

Example 2:

Proposal No:            PI Name/Institution                                      

-------------------         --------------------------------------------------                                 

12345789                 Jane Doe/University of Washington


Year:  NSF regulations state that the organization can define the year.  UW has defined this as its fiscal year, which runs from July-June. 

For example, FY 2019 is July 2018 – June 2019.

Organization/Grantee:  This is the UW as it is the grantee of the NSF Award.


Regulation Interpretation & Approval

The UW’s interpretation of this NSF regulation is that any Senior Personnel listed on an NSF Award, cannot be paid more than two months of their IBS on all NSF Awards in a UW Fiscal Year.  This two-month limitation can only be exceeded by: 

In the Proposal:  If, at the time of proposal preparation, you know that the Senior Personnel will exceed the two month limit then include language in the proposal that identifies that the limit will be exceeded and request approval as part of the submission.  The language can be as simple as: 

 "In accordance with section II.C.2.g.(1)(a) of the PAPPG, sponsor approval is required if upon issuance of this Award the Senior Personnel will exceed the two-month limitation for all effort on NSF Awards in the UW’s fiscal year.  For this proposal submission, we expect that <<NAME SENIOR PERSONNEL>> will expend <<XX>> month(s) on this Award and that, combined with existing NSF Awards, will put them over the 2-month limit.”

If the proposal is fully funded then Sponsor approval will considered to have been obtained. 

Post-Award, Sponsor Approval:  If the request was not made as outlined above in the proposal, then written NSF approval to exceed the two month limit must be obtained.  

Post-Award, Rebudgeting:  Per the NSF regulations, if the proposals submitted do not have the Senior Personnel exceeding the 2 month rule, but due to re-budgeting the effort now exceeds 2 months, NSF approval does not need to be obtained.  Instead there just needs to be a note to the file that due to rebudgeting the Senior Personnel's effort has now exceeded the 2-month limit.  

In order to comply with this requirement, departments must be able to track salary (IBS) already paid and proposed to be paid on NSF Awards within a UW fiscal year.  The tools described in the next section will assist departments in this tracking.

Calculation & Tracking Resources

The following resources have been developed to assist departments in determining if Senior Staff will, or already have, exceeded the two-month rule:

EDW NSF Compensation by Fiscal Year Report

This report shows the salary (IBS) payments to date by UW Fiscal Year for staff who may be identified as Senior Personnel on an NSF Award.  As there is no UW designation for NSF’s definition of “Senior Personnel” a list of staff who may be identified as Senior Personnel has been provided.  The designation used for this report is any personnel whose IBS is charged to the following Object Codes:

  • 01-10:  Instruction and Research Faculty
  • 01-20:  Auxiliary Teaching Staff
  • 01-30:  Graduate School Student Appointments--Teaching Staff Salaries
  • 01-40: Graduate School Student Appointments--Non-Teaching Salaries
  • 01-70:  Professional Staff
  • 01-80:  Temporary Staff (Hourly Rate) Salaries, In-Excess Payments to Faculty, Staff Overtime

Use this report by selecting the UW Fiscal Year and enter the personnel’s Employee Identification (EID) number.  The report will then display all IBS amounts paid to date for that person on all NSF awards.

An example report:  



In this example, Senior Personnel Jane Doe has expended $35,210 on all NSF Awards for Fiscal Year 2019 through the January 31 pay period.   At the UW, salary payments are made twice a month, posted on the 15th and last day of the month.  The last pay period listed on this report is 1/31/2019 so it shows FY 2019 IBS payments from June 2018 through the end of January 2019.

This information can be used to determine the current status of a Senior’s Personnel’s 2-month limitation.  This is done by multiplying the person’s current IBS by two and comparing it to the total on the EDW report.  If the IBS x 2 is less than the amount on the report, then the person has exceeded the 2-month limitation.  Awards should be reviewed to determine if re-budgeting has occurred or if approval was sought at the time of proposal.

Using the example above, if Jane Doe’s monthly IBS is $15,000 then 2-months IBS would be $30,000, which is less than the $35k paid to date so Jane has exceeded the 2-month limitation.  If Jane’s monthly IBS is $20,000 then she has not exceeded the limitation as $40,000 is greater than the $35k paid to date.


NSF 2-Month Rule Worksheet & Worksheet User Guide

The NSF 2-Month Worksheet can be used to determine if Senior Personnel are projected to exceed the 2-month limitation within a fiscal year.  It is advised that the worksheet be completed at the time of proposal to determine if the Senior Personnel will exceed the limitation, in which case NSF approval can be obtained at the time of proposal.   This worksheet is for department use only and does not need to be submitted to OSP or attached to the eGC1.

A Worksheet User Guide has been developed to assist in completion of the worksheet.