NIH Salary Cap

Since 1990 Congress has legislatively mandated limits to the direct salary that an individual may receive under an NIH grant.  Since 2001, these caps are tied to Executive Level I pay scales.  For current rate caps see: http://grants.nih.gov/grants/policy/salcap_summary.htm.

In developing a budget for an application that includes a categorical breakdown in the budget, the proposal should continue to reflect the actual institutional base salary of all individuals for whom reimbursement is requested. NIH does allow applicants to provide an explanation indicating that actual institutional base salary exceeds the current salary limitation. When this information is provided, NIH staff will make necessary adjustments to requested salaries prior to award.

For an example of NIH salary cap calculation see Personnel Compensation.

NOTE: Although actual salaries are used for budget development purposes, NIH will not award funds for nor may SU expend funds on salaries whose rates exceed the cap in place at the time of expenditure.

The salary limitation provision also applies to subawards for substantive work under an NIH grant or contract.

An individual’s base salary, per se, is NOT constrained by the legislative provision for a limitation of salary. The rate limitation simply limits the amount that may be awarded and charged to NIH grants and contracts. An institution may pay an individual’s salary amount in excess of the salary cap with non-federal funds.

NIH considers the terms “direct salary,” “salary,” and “institutional base salary” to have the same meaning and are exclusive of fringe benefits and facilities and administrative (F&A) expenses. An individual’s institutional base salary is the annual compensation that the applicant organization pays for an individual’s appointment, whether that individual’s time is spent on research, teaching, service, or other activities. Base salary excludes any income that an individual may be permitted to earn outside of the duties to the applicant organization.