NIH Issues Salary Cap Guidance

NIH has issued salary cap guidance (click here to read attached notice.) We encourage you to read the notice carefully.  Please see below for a high level summary. 

• Implementation of the lower level salary cap ($179,700) is effective with FY2012 awards where the initial Issue Date of the award is on/after 12/23/2011. For FY2012 awards issued on/before December 22, 2011 (competing and non-competing), the effective salary limitation remains at Executive Level 1 ($199,700)
• NIH competing grant awards with an initial Issue Date on/before December 22, 2011 with categorical budgets reflecting salary levels at or above the new limit may continue to apply the Executive Level I salary levels for the FY2012 award period. No adjustments are required. However, future years for these awards will be adjusted to reflect Executive Level II.
• For non-competing grants with initial Issue Dates on/before 12/22/2011, the applicable salary limitation is Executive Level I; for non-competing grants with an initial Issue Date on/after 12/23/2011, the applicable salary limitation is Executive Level II.
• Any grants awarded in previous fiscal years (e.g., FY 2011, FY 2010, etc.) are not impacted by the FY 2012 salary limitation. Carrying over previous years’ funds to support salaries will remain at the salary limitation levels in effect at the time those awards were issued.
• Competing grant applications and contract proposals that include a categorical breakdown in the budget figures/business proposal should continue to reflect the actual institutional base salary of all individuals for whom reimbursement is requested. In lieu of actual base salary, however, applicants/offerors may elect 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.
• The salary limitation does NOT apply to payments made to consultants under an NIH grant or contract although, as with all costs, those payments must meet the test of reasonableness and be consistent with institutional policy.
• The salary limitation provision DOES apply to subawards/subcontracts for substantive work under an NIH grant or contract.
• If a grant was issued on/after December 23, 2011 and it is a non-competing award, then grantees may rebudget the funds awarded in excess of the new salary limit. However, if the grant is a competing award, the NIH IC will revise the award when an adjustment for the lower salary limit is needed.

Please feel free to contact Rachel Cahoon should you have any questions.