2 CFR 200.430 (Compensation, Personal Services), explained in plain English

Where it sits

2 CFR Part 200 is the Uniform Guidance, the rulebook for federal awards to states, local governments and nonprofits. Section 200.430 covers compensation for personal services: salaries, wages and fringe benefits.

The three tests for any salary charge

Underneath the language, the regulation asks three things:

• Is it reasonable? Would a prudent person pay this, for this role, in this labor market? Consistent with what you pay for comparable non-federal work.
• Was the work actually done? The charge reflects real activity, not a plan.
• Can you show it? Records exist that support the distribution. Adequate documentation is one of the allowable cost tests in §200.403.

The third test is where the gap shows: the work happened, but the record of it did not.

The documentation standards, in plain terms

These live at §200.430(g). If you have seen them cited as (i), that was correct before the Uniform Guidance revision effective 1 October 2024, which moved them.

The regulation lists what your records must do. Translated:

• "Supported by a system of internal control." There's a repeatable process with a check in it, not one person's memory. The same duty covers all your federal work under §200.303 on internal controls.
• "Incorporated into official records." The time records are part of your books, not a side spreadsheet, and those books must meet §200.302 on financial management.
• "Reasonably reflect total activity." All of someone's work is accounted for, not only the grant-funded part.
• "Encompass federally-assisted and all other activities… on an integrated basis." Same point, stated again, because it is easy to miss.
• "Comply with established accounting policies." You follow your own written policy.
• "Support the distribution of the employee's salary or wages among specific activities or cost objectives." The record shows which grant or program the time went to, which is how you split the salary under §200.405 on allocable costs.

The part people misread

§200.430 does not prescribe a form, a frequency, or a product. It sets an outcome: records that reasonably reflect what happened, produced by a system you can describe. Two organizations can comply in completely different ways. If you want a starting point, a time and effort certification template gives you three versions to copy.

What it does rule out is charging from a budget and never looking back. Budget estimates may be used for interim accounting, but they must be adjusted to reflect actual activity.

Common slips, and the fix

• Documenting only grant time. A record showing 40% on a grant with no account of the other 60% doesn't demonstrate anything.
• Signing everything at year end. Certifications created months later are worth much less than contemporaneous ones.
• Charging the budget. The same percentage every month, all year, with no after-the-fact review, is what §200.430(g)(1)(vii) rules out.
• No written policy. "What's your process?" is a question an auditor will ask, and the answer should be a document.
• Records that don't tie to payroll. What the grant was charged and what the person was paid must reconcile.

This is general information, not legal or accounting advice. Federal grant rules change and are applied differently by different agencies and auditors. Check with your auditor, your grant officer, or an attorney before relying on any of it.

The Ember tool for this

Ember Time

Ember Time lets your team log time by program, and you approve the week. Approved hours for hourly staff become each program's staff cost at the rate you set. Unlimited users on every tier.

Sources: 2 CFR Part 200 (eCFR), §200.430. Verified August 2026. Read the section itself before relying on any summary.