2 CFR 200.430, Explained in Plain English

Updated August 2026

The regulation that governs how you charge salaries to a federal grant — translated out of regulation-speak.

The short version

§200.430 says salary charged to a federal award must be reasonable, must be for work actually performed, and must be backed by records that reflect the employee's whole workload — supported by your normal internal controls, not a special grant-only process.

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.

Most audit findings are the third test. The work happened; the documentation didn't.

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.
"Incorporated into official records." The time records are part of your books, not a side spreadsheet.
"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's the one people 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.

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.

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.

Where small organizations get caught

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, is the single most recognisable finding.
No written policy. "What's your process?" is one of the first questions in an audit, 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

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Common questions

What does 2 CFR 200.430 cover?

Compensation for personal services — how salaries, wages and fringe benefits may be charged to a federal award, and what documentation must support the charge.

Does 200.430 require a specific form?

No. It sets an outcome — records that reasonably reflect actual work and are supported by internal controls — not a prescribed format.

Can we charge salaries based on our budget?

Budget estimates may be used for interim charging, but they must be reconciled to actual activity and adjusted. Charging a budget percentage all year without revisiting it is a common audit finding.

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Keep reading

What is time and effort reporting?Common single audit findings Do we need timesheets for federal grants?Browse all guides

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