Direct Cost Issues (4 of 17)

NIH Salary Cap

The NIH salary cap limits the amount which can be charged to an NIH project (or related cost sharing account) by limiting the maximum annual salary rate for a 100%, 12-month FTE. The rate is set annually and applies to all awards made that year.


NIH establishes the funding limitation for salaries at the time that a competitive award is made. However, if subsequent (non-competing) funding is awarded during a year with a higher salary cap, NIH will allow existing funds to be re-budgeted to that level. Typically, no new funds will be awarded for this purpose.

• NIH salary cap may change annually
• NIH funds salary up to the level of the cap in effect on the award date

When Proposing Effort

When submitting salary information to NIH as part of a budget request, actual salary estimates should be used, even if they are in excess of the caps. NIH will reduce the amount awarded, if necessary, to the cap in effect when the award is activated. When estimating budgets for a modular grant application, the best estimate of the NIH cap that will be in effect when the grant is awarded should be used. (OSP website)

How to Charge the Difference

The difference between the actual salary and the limited rate for the effort charged to the NIH project must be charged to unrestricted funds. The effort associated with any salary above the NIH imposed salary cap is considered mandatory cost share of effort.

Administrators should contact Grant and Administrative Services with any questions regarding correct procedure for distributing personnel expenditures above the NIH salary cap.

Key References

The current schedule of applicable salary caps for NIH awards, as defined in NIH NOTICE: NOT-OD-07-051 dated February 22, 2006

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Last modified December 12 2007 02:13 PM