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NIH Salary Cap

The US Department of Health & Human Services (DHHS)/NIH imposes a base salary cap for employees paid from its sponsored awards. A salary cap is the maximum annual Institutional Base Salary that can be charged on the DHHS/NIH award.  The percentage of effort charged to a sponsored award where a salary cap is applicable cannot be applied to more than the maximum capped salary rate for the pay period.

 

Example of this calculation with 100% effort:

Faculty member with a full-time 12-month appointment on a DHHS/NIH award:

Faculty member’s Institutional Base Salary (IBS)                           $200,000

Awards issued 1/7/18-9/30/18 Salary cap limitation                       $189,600

Difference to be paid from Institutional source:                                  $10,400

 

Calculation of partial effort:

      Research Effort Requested on Award : 30% or 3.6 months

Calculating Effort:

                          Faculty member’s IBS    $200,000

                          Effort                                      x 30%

                           30% effort without NIH Cap                        $60,000

 

Implementing the NIH Salary Cap:

Awards issued 1/7/18-9/30/18 Salary cap limitation         $189,600

Partial Effort                                                   x 30%

Maximum allowance to charge NIH award                            $56,880

 

Of the $200,000 IBS, the amount to be paid  from an Institutional Source is the difference:                                                                                                                                                                           $3,120

 

The portion of effort applied to the amount of the Institutional Base Salary over the cap cannot be charged to other sponsored awards or used to fulfill cost share obligations.  It is the departmental responsibility to ensure that salary cap limits are complied with.  Cost Accounting will provide ongoing oversight to ensure the University is in compliance with salary cap limits.

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