NIH Salary Cap Presentation

Salary Cap
Salary cap is the difference between what is
charged and the cap which is allowed by NIH
Example (FY):
PI Salary: $250,000
NIH Cap (2011): $199,700
100% Effort
Monthly Sal: $20,833
Monthly Cap: $16,642
**Difference: $4,191 (Amt to be Cost Shared)
10% Effort
Monthly Sal: $2,083
Monthly Cap: $1,664
**Difference: $419 (Amt to be Cost Shared)
Grants, Cooperative Agreements, and Contracts
Things to remember:
 Direct Salary, Salary, and Institutional Base Salary
hold the same meeting in relation to the NIH
salary limitations
 Institutional Salary is the individual’s annual
compensation that the organization pays for their
 Salary cap, as listed by NIH, is noted as FY Salary,
not AY
FY 2011 Salary Cap
 Fiscal Year Employee: $199,700
 Academic Year Employee: $149,775
 Or $16,642 monthly salary
Grants, Cooperative Agreements, and Contracts
FY12 Salary Cap – Executive Level II ($179,700 FY;
$134,775 AY; Monthly Salary $14,975)
 Effective with awards issued on or after December
23, 2011.
 FY 12 funds issued prior to this date will be
calculated with the old rate of $199,700 (FY).
 Carry over funds from previous years will remain at
the salary limitation level in effect at the time those
awards were issued.
New Award
 Sponsor Accounts and Salary Cap Cost Share
Accounts will be established and utilize “FY12”
within their title to indicate the appropriate level
to be used
Increases (Non-Competing)
 New Sponsor Accounts and New Salary Cap Cost
Share Accounts will be established and named
Increases- Continued
 Unobligated balances from previous years’ awards
will remain in their original accounts
▪ Salary charged to these funds will use the salary cap level in
effect at the time the award was issued
 Executive Level II (FY12) limitations will not be
effective until the FY12 funds are used
▪ EX: PI’s salary is $200,000
▪ Level used when tracking Salary Cap on “old” funds would be
▪ Level used when tracking Salary Cap on “new” funds would be
• NIH is currently working under Continuing Resolution, therefore, all
legislative mandates that were in effect in FY 12 remain in effect now.
• This includes the Salary Limitation at Executive Level II ($179,700 FY)
• FY13 funds issued while Continuing Resolution is in effect will be added to
existing FY12 accounts within the grant and the SP title will be changed to
include “FY13”
An increase in the Salary Cap limitation will affect the
amount that will need to be cost shared
 An increase or decrease in PI salary will affect the
amount that will be cost shared or if Salary Cap is
 Changes in the PI’s effort on the project will change
the cost distribution between sponsor dollars and cost
share dollars
**Effort only changes the dollar amount of cost share required, not if Salary Cap
is applicable
**If Salary Cap is increased, but the PI’s salary stays the same, Salary Cap could
cease to apply; if the PI’s salary then falls under the new cap
Fiscal Year Employee and Academic Year Employee
Salary Cap FY
Salary Cap AY
Monthly Cap
*Effective with awards issued for FY12 on or after December 23, 2011
Academic Year (monthly)
 (Institutional Salary* 1/9) * Effort
Fiscal Year (monthly)
 (Institutional Salary * 1/12) * Effort
Salary Cap: $16,642 * Effort
▪ $16,642 is based off the current NIH Salary Cap of $199,700
 $199,700/12=$16,642
**Fringes are budgeted, but the PI’s salary drives the Cap, fringes just follow.
Institutional Salary: $200,000
 ($200,000*1/9) * Effort (100%)
 =$22,222
 ($149,775*1/9) * Effort (100%)
 =$16,642
▪ Cost Share= $5,580
 ($200,000*1/9) * Effort (10%)
 =$2,222
 ($149,775*1/9) * Effort (10%)
 =$1,664
▪ Cost Share= $558
FY Employee Example
AY Employee Example
FY12 Example
Notify SPS personnel when an individual has
exceeded the salary cap limitation and is paid on
an NIH funded research project (41020000)
 This applies to all personnel working on a project.
Provide SPS with budget (salary and fringes) for
the Salary Cap Account
 Accurately charge salaries to sponsor accounts
and related cost sharing accounts based on PI’s
effort certification
 If effort changes at any point, the distribution should
change to ensure proper allocation to the salary cap
and sponsor accounts
Update your Salary Cap spreadsheet on a
monthly basis to track and ensure compliance
with the sponsor regulations
 This is the ideal time to verify salary levels for the
PI and make appropriate adjustments
Correct any non-compliance issues upon
Distribute Agency guidelines to University
Departments via Business @ Purdue
Review Salary Cap at PAR time
Contact business office personnel in the
event of non-compliance
Meet with business offices upon request to
discuss account specifics and/or overall
management of salary cap faculty members
Megan Sweet (Sr. Account Mgr)
 765-494-6367
Natasha Lavrenz (Account Mgr)
 765-494-1066
Please use generic e-mail ([email protected])
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