# Budget Development

Q:  How is my total salary including fringe calculated for each budget period?

A: There are several steps to this process.  Lets use an example of someone who makes \$100,000 per year and wants to dedicate 1% of their time per year with a 3% yearly increase in salary.

 Explanation Formula Our Example Results used for total First we need to calculate their monthly salary. (Yearly salary / 12) (\$100,000/12) = \$8,333.33 Next we need to calculate amount of person months they will be dedicating to the project. (percent effort x number of months) (.01 x 12) = .12 We take the number of person months and multiply it by the monthly salary and any yearly increase.  This will be our salary for each year. (Person months x monthly salary x yearly increase) (.12 x \$8,333.33 x 1.03) = \$1,030 \$1,030 To calculate fringe we would take the yearly project salary and multiply by the appropriate fringe rate. (Fringe rate x project salary) (.168 x \$1030) = \$173 \$173 To calculate insurance we would take the appropriate insurance rate and multiply by person months. (Insurance rate x person months) (.12 x \$747) = \$90 \$90 Total Salary including fringe \$1,293