How do teaching buy outs work?
Nearly every school will have a different policy on buying out of teaching.

In the US, many universities have a breakdown of the position's time. For example, you may be hired to do 60% research, 20% teaching, 20% service. At some universities, this means the grants must cover the percentage of your salary that you are buying out of. At others, there is a flat buyout price (presumably the amount it costs to pay an instructor). Although, some also have requirements for a minimum number of courses you must teach per year (can't buy out).

You can also get a reduced teaching load through additional service (e.g, serving as graduate coordinator or department chair).