Plans change. Maybe a contractor costs less than expected, or you need equipment you didn't budget for. Moving money between budget categories is called re-budgeting. This article covers:

When you can just make the change
When to keep your program officer posted
When you need written approval first

The three kinds of budget changes

Type	What it means	What to do
1. Small change	Under your agency's threshold and no change to the project's aims	Go ahead. Keep a note of why in your records.
2. FYI change	Allowed without approval, but your program officer would want to know	Send a short FYI email, then go ahead.
3. Approval change	Over the threshold, or changes scope, people, subawards or your end date	Ask first. Wait for a written yes before you spend.

Not sure which one you have? Message us and we'll check it against your award.

Thresholds by agency

Here's where the line falls for each kind of change.

NSF SBIR/STTR

Small change: moving less than 5% of the total budget between categories.
- The costs must be allowable and further the project.
- Go ahead (PAPPG X.A.3).
FYI change: still under 5%, but something your Program Director would notice.
- The change affects how the work gets done.
- A milestone is slipping.
- You're getting close to 5%.
- NSF expects you to report significant changes and delays even when no approval is needed (PAPPG VII.B.1.c).
Approval change: ask your Program Director first. An email approval works (America's Seed Fund).
- Moving more than 5% of the total budget.
- Moving Technical and Business Assistance (TABA) funds to anything else.
- Extending your end date (see no-cost extensions below).

Good to know: NSF SBIR awards are fixed-amount awards. The 5% rule still applies.

NIH SBIR/STTR

Small change: most moves between direct cost categories.
- The project's scope must stay the same.
- Go ahead (GPS 8.1.1.2).
FYI change: give your program officer a heads-up when:
- One category is creeping toward 25% of the total award (say, past 20%).
- The change affects how you'll run the work.
- You plan to take your first no-cost extension.
Approval change: NIH may treat these as a change in scope (GPS 8.1.2.5).
- Moving 25% or more of the total award in one category. On a $300,000 award, that's $75,000.
- Buying a single equipment item over $25,000.
- Talk to your program officer first. Send formal requests through the eRA Prior Approval Module.

Good to know:

Non-Fast Track Phase I awards (R43/R41) can't automatically carry unspent funds into the next period (GPS 8.1.1).
Check your Notice of Award. Some awards restrict these authorities.

DoD and other SBIR contracts

Contracts work differently from grants. Your budget is part of the contract, so most changes need approval.

Small change: usually none. Treat any budget change as needing approval unless your contract says otherwise.
FYI change: let your Contracting Officer and technical point of contact know about:
- Delays
- Vendor swaps
- Results that look different than expected, even when costs don't change
Approval change: moving money between cost elements or changing your end date.
- This usually goes through your Contracting Officer as a contract modification.
- Ask before you spend.

Changes that always need approval

No matter the dollar amount, get written approval (or file the right notice) before you make these changes.

Change	NSF rule	NIH rule
Change the project's scope, aims or objectives	PAPPG VII.B.1.a	GPS 8.1.2.5
Change the PI, or the PI is away 3+ months or cuts effort by 25% or more	PAPPG VII.B.2 (ask 30+ days ahead)	GPS 8.1.2.6
Change other key personnel named in the award	Ask your Program Director	GPS 8.1.2.6
Add a subaward that wasn't in your proposal	PAPPG VII.B.4	NOT-OD-24-149 (includes a foreign risk check)
Move participant support costs to another category	PAPPG II.D.2.f(v)	Check your Notice of Award
Extend your end date with no extra money (no-cost extension)	Request it in Research.gov at least 45 days before your end date. NSF approves it (America's Seed Fund, PAPPG VI.D.3.c)	The first one, up to 12 months, doesn't need approval. File it in eRA Commons before your end date. Any extension after that needs NIH approval (GPS 8.1.1.3)

About no-cost extensions

You need a real reason, like work still left to finish. Leftover money on its own isn't enough.
Don't spend money after your end date while you wait for an answer.
On NSF Phase I, an extension doesn't give you more time to submit your Phase II proposal.

Your award terms always win. If they say something different from this article, follow your award.

Changes to keep your program officer posted on

Some changes are allowed without asking. They can still surprise your program officer at your next report if you never mentioned them. A short heads-up builds trust and makes your next approval request easier.

Send a quick FYI email when:

You move money between categories but stay under the approval threshold.
You swap a planned vendor or consultant for another one doing the same work.
A milestone is running late, or results are coming in differently than you expected.
You're getting close to a threshold, like 4% on NSF or 20% in one NIH category, and may need approval later.
You think you may need a no-cost extension. Raise it early, well before the deadline.

NSF also expects you to report significant changes, delays or events of unusual interest, even when no approval is needed (PAPPG VII.B.1.c).

You can fold an FYI into a regular status update. See How to send a status update to your program officer.

Moving money between fringe and salary

This one comes up a lot. Your budget estimated fringe at 20%, but your actual fringe is lower. For example, part-time staff who only get required benefits might come in closer to 10%. Can you use the difference to raise salaries?

The fringe side

You charge fringe at your actual cost, based on your written benefits policy. The percentage in your budget was only an estimate (2 CFR 200.431).
Benefits must follow the same policy for every employee, whether they're on the grant or not.
On NIH, moving money from fringe to salary is normal rebudgeting. It usually doesn't need prior approval (GPS 8.1.1.2). On NSF, the 5% rule above applies.

The salary side

Pay must be reasonable and in line with what your company pays for similar work outside the grant (2 CFR 200.430).
Auditors look closely at big raises that line up with new federal funding.
"We had fringe budget left over" isn't a strong reason for a raise on its own.
NIH caps salary at $228,000 a year, as of January 11, 2026 (NOT-OD-26-034).

Before you raise salaries

Base the new pay on market rates for the role.
Write it into your company's compensation policy.
Apply it the same way to similar staff who aren't on the grant.
Give your program officer and grants management specialist a heads-up. Budget questions usually go to the grants management specialist, so copy both.

How to explain a budget change

Program officers care about one thing: will this help the project succeed? Explain every budget change by how it improves the research outcome. Connect it to:

Better results
Faster progress
Lower risk

Examples that work

Contractor savings to testing: "Our prototyping contractor came in $12,000 under budget. We'd like to use those funds for materials to run a second round of validation tests. This lets us confirm our accuracy results across more conditions, which strengthens the case for feasibility."
Travel to equipment: "We planned three in-person site visits but can collect the same data remotely. Moving $8,000 from travel to a field sensor lets us capture continuous data instead of three snapshots, which gives us a much better picture of performance."
Supplies to personnel: "Early results showed the analysis takes longer than planned. Moving $15,000 from supplies to salary for a part-time data engineer keeps our Aim 2 testing on schedule and lowers the risk of an incomplete final report."
Consultant swap: "Our original consultant is no longer available. We'd like to bring in [name], who has direct experience with [specific technique]. The cost is the same, and their background lowers the technical risk for Aim 1."
No-cost extension: "Our second round of field tests was delayed by weather. A 6-month no-cost extension lets us finish the full test set, so our final report covers every condition we proposed."

Explanations to avoid

"We have money left in this category." Say what the money will do for the research instead.
"Costs went up." Explain why the extra spend is worth it for the project.
Anything about covering costs outside the project, like general company expenses.

Emails you can copy

Replace everything in [brackets] with your own details. For NIH, formal prior approval requests go through the eRA Prior Approval Module.

FYI email (no approval needed)

Subject: [Award #] Budget update: [short project title]

Hi [Program Officer],

A quick update on award [number]. We're planning to move $[amount] from [category] to [category]. As we understand it, this falls within the flexibility our award allows, but we wanted to keep you in the loop.

The reason: [one sentence on how this helps the research]. The project's aims and timeline don't change.

Happy to share more detail, and let us know if you see it differently.

Thanks,

[Name]

Approval request email

Make sure your request includes:

Your award number
What's moving, and how much
How it improves the research
Whether the aims change
A revised budget, if the change is large

Subject: [Award #] Prior approval request: budget change

Hi [Program Officer],

For award [number], we'd like to move $[amount] from [category] to [category].

The reason: [one or two sentences on how this improves the research outcome]. This doesn't change the project's aims or scope. A revised budget is attached.

Could you confirm this is approved?