Budget Justification

NIH requires a personnel justification for modular (up to $250,000/year) budgets. For non- modular budgets (over $250,000) NIH requires justification for all budget categories.

Once you have created a budget and completed a budget spreadsheet, you will want to write a budget narrative. The budget narrative is sometimes referred to as the budget justification. The budget narrative has two purposes: it explains how the costs were estimated and it justifies the need for the cost. You want to show as much detail as possible by thoroughly and clearly describing each item, explaining how you arrived at dollar amounts and giving enough detail so the costs correspond to the project's activities and goals described.

For instance, you should include the percent of effort for each person, the percent of fringe for each person, travel information (where, how, length, amount of people), specific supplies, and any other information that provides specifics that will validate your budget. Make sure the narrative follows the line items exactly. When costs seem high or low, the budget narrative can provide the explanation. You want your budget narrative to match the information on the budget spreadsheet. Do not make reference to leveraged, donated, and matching funds. As a general rule of thumb, if you are not requesting funding for it, do not talk about it in the budget narrative.

Personnel Justification (NIH modular budget)

Provide an additional narrative budget justification for any variation in the number of modules requested.


We are requesting two additional modules in year one for the purchase of Super Widgets ($38,000) to be used for analysis of X in Specific Aim 1.

List all personnel, including names, number of person months devoted to the project (indicate academic, calendar, and/or summer) and roles on the project. Do not provide individual salary information. Since the modules should be a reasonable estimate of costs allowable, allocable, and appropriate for the proposed project, you must use the current legislatively imposed salary limitation when estimating the number of modules.

NIH grants also limit the compensation for graduate students. Compensation includes salary or wages, fringe benefits, and tuition remission. This limit should also be used when estimating the number of modules. 


Jayne Dough, Ph.D. – Principal Investigator, 0.9 academic months, 1.0 summer

Dr. Dough will have overall responsibility for the projects outlined. Specifically, she will design, plan, and carry out the proposed research, analyze the results…

Jon Smyth, Ph.D.–Research Associate, 12.0 calendar months.

Dr. Smyth has expertise in ….. and will be responsible for …

Note: some agencies require effort to be listed as calendar months, some as percentages – justify accordingly.

Consortium Justification

Provide an estimate of total costs (direct plus facilities and administrative) for each year, rounded to the nearest $1,000. List the individuals/organizations with whom consortium or contractual arrangements have been made, along with all personnel, including percent of effort (in person months) and roles on the project. Do not provide individual salary information. Indicate whether the collaborating institution is foreign or domestic. While only the direct cost for a consortium/contractual arrangement is factored into eligibility for using the modular budget format, the total consortium/contractual costs must be included in the overall requested modular direct cost amount.

Budget Justification NIH non-modular

Budget Justification is required for every item on the detailed budget:

  • All personnel justified, person months used.
  • All categories justified, supplies, equipment, travel, publication costs, etc.
  • Justification includes how future years’ escalation was calculated.
  • Justification includes how fringe benefit rates were calculated.
  • Names and categories are in the same order as they appear in the detailed budget.
  • All subtotaled dollar amounts add up to the totals, AND the total dollar amounts match amounts listed in the detailed budget.