Division of Research

NIH Salary Cap Policy

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NIH Salary Cap Policy

As part of the budget appropriations of the National Institutes of Health (NIH), Substance Abuse and Mental Health Services Administration (SAMHSA) and Agency for Healthcare Research and Quality (AHRQ), the U.S. Congress legislatively mandates a salary cap. The salary cap applies to grants, cooperative agreements and contracts (with the exception of those that are clearly defined to be exempt from the cap).

Since 2001, the cap has been set at the Executive Level 1 of the federal executive pay schedule. View the salary cap from previous years on the NIH website.

View Current and Past NIH Salary Caps

The salary cap limits the rate of academic and summer salary that may be charged to NIH, SAMHSA and AHRQ awards. Brown University considers academic or calendar year salary in excess of the imposed cap as mandatory cost sharing. The amount in excess of the cap cannot be used as matching funds. The University may pay an employee’s salary amount in excess of the salary cap from non-sponsored project funds.

Brown University’s Position on Implementing NIH Salary Cap

Brown will comply with all salary cap requirements of sponsors making awards to the University in support of research or other activities. Where an agency specifies a maximum rate at which an individual may be paid from that agency’s funds, Brown will ensure that any salary above that rate will not be charged against the grant, contract or cooperative agreement issued by that agency.  Salary in excess of the NIH salary cap is considered mandatory cost sharing and should be identified during the proposal phase of an award. 

NIH will fund the salary cap at the level in effect at the time the competitive award is issued. If, during the period of that award, the salary cap is increased, under applicable rebudgeting authority you may pay the salary at the higher level. NIH however will not award any additional funds for this purpose.

Award Stage

It is Brown’s policy that documentation related to all awards from NIH, SAMHSA and AHRQ with individuals, whose salary is above the NIH salary cap, include the NIH Salary Cap Worksheet.

NIH Salary Cap Worksheet

Once an award has been made, the costing allocation is submitted through Workday and the salary reflected on the costing allocation must conform to the applicable NIH salary cap in effect.

When preparing the costing allocation, the monthly salary amount charged to a NIH award during the academic year and/or summer cannot exceed the NIH monthly cap rate multiplied by the percentage of effort.

The NIH Salary Cap Worksheet must be completed and attached to the costing allocation in Workday.

Effort Certification Report

When completing effort reports, the reported percentage of effort for an individual over the NIH salary cap must represent a reasonable estimate of effort expended on the project, not the percentage of salary charged. This percentage must include the effort that could not be charged to the award because of the NIH salary sap.

NIH Salary Cap Procedure / Award Stage (Policy No. 400.3) [PDF]

Definitions

Institutional Base Salary: Institutional Base Salary, or IBS, is the total guaranteed annual compensation an individual receives from Brown University. The Institutional Base Salary shall be used to compute salaries charged to NIH-sponsored programs. The Institutional Base Salary includes an individual’s academic-year salary as well as any stipend received from performing other administrative duties, whether as a center director, department chair or program director.

NIH Salary Cap: The salary cap is a legislatively mandated provision limiting the direct salary (also known as Institutional Base Salary, but excluding any fringe benefits and facilities and administrative costs) for individuals working on NIH grants, cooperative agreements and extramural research and development contracts.

Salary Cap Cost Sharing: Salary cap cost sharing is cost sharing that occurs when the University proposes or later assigns effort by individuals whose salary exceeds a sponsor-imposed salary cap.

Salary Limitation: Salary limitation is a legislative provision that changes annually in accordance with the appropriation. The salary rate limitation stipulates that no appropriated funds shall be used to pay the salary of an individual over the capped rate.

Roles and Responsibilities

Principal Investigators (PIs)

  • Manages project funds in compliance with sponsor requirements
  • ​Ensures appropriateness and accuracy of effort expended on a sponsored project
  • Responsible for ensuring compliance with any salary limitations imposed by sponsors 

Department Administrators

  • Establishes effective policies and controls to ensure compliance with this policy
  • Identifies all individuals whose salary is over the cap
  • Prepares proposals and applicable documents in accordance with policies and procedures
  • Responsible for ensuring compliance with any salary limitations imposed by sponsors

Sponsored Projects

  • Maintains communications with funding agencies to assure understanding of agency requirements
  • Develops and implement salary cap policies, procedures, and training sessions in accordance with sponsor regulations
  • Reviews proposals, awards, and other associated documents to ensure compliance with policies and procedures
  • Responsible for ensuring compliance with any salary limitations imposed by sponsors

About this Policy

The official version of this information will only be maintained in an online format. Any and all printed copies of this material are dated as of the print date. Please make certain to review the material online prior to placing reliance on a dated printed version. 

Revision History

  • Version 1: New procedure — October 1, 2011