NIH Salary Cap

According to the Consolidated Appropriations Act 2005, "None of the funds appropriated in this Act for the National Institutes of Health, the Agency for Healthcare Research and Quality, and the Substance Abuse and Mental Health Services Administration shall be used to pay the salary of an individual, through a grant or other extramural mechanism, at a rate in excess of Executive Level I“ of the Federal Executive Pay Scale. This is the fifth year that the limitation has been linked to Executive Level I of the Federal Pay Scale.

For the purposes of the salary limitation, the terms "direct salary," "salary," and "institutional base salary" have the same meaning and are exclusive of fringe benefits and facilities and administrative (F&A) expenses, also referred to as indirect costs. An individual's institutional base salary is the annual compensation that the applicant organization pays for an individual's appointment, whether that individual's time is spent on research, teaching, patient care, or other activities. Base salary excludes any income that an individual may be permitted to earn outside of the duties to the applicant organization.



HOW TO DETERMINE APPLICABLE NIH SALARY To determine the applicable NIH salary cap amount, use the following steps: 1) DETERMINE WHAT FEDERAL FISCAL YEAR IS FUNDING THE GRANT BUDGET PERIOD
	NGA budget period beginning:
	10/1/00 or later 10/1/99 or later 10/1/98 - 9/30/99 Earlier than 10/1/98	Use FY 2001 Rules Use FY 2000 Rules Use FY 1999 Rules Use FY 1998 Rules


2)	DETERMINE APPLICABLE SALARY CAP BASED ON THE FISCAL YEAR RULES AND TIME PERIODS SHOWN BELOW
	Federal FY	Salary Cap (annual rate)	Salary Cap (monthly rate)	Use for Salaries Earned During the Budget Period:
	FY 2008	$191,300	$15,942	01/01/08 - 12/31/08
	FY 2007	$186,600	$15,550	01/01/07 - 12/31/07
	FY 2006	$183,500	$15,292	01/01/06 - 12/31/06
	FY 2005	$180,100	$15,008	01/01/05 - 12/31/05
	FY 2005	$175,700	$14,641	10/01/04 - 12/31/04
	FY 2004	$175,700	$14,641	01/01/04 - 12/31/04
	FY 2004	$171,900	$14,325	10/01/03 – 12/31/03
	FY 2003	$171,900	$14,325	01/01/03 - 9/30/03
	FY 2003	$166,700	$13,891	10/01/02– 12/31/02
	FY 2002	$166,700	$13,891	01/01/02 – 9/30/02
	FY 2002	$161,200	$13,433	10/01/01 – 12/31/01
	FY 2001	$161,200	$13,433	01/01/01 – 9/30//01
	FY 2001	$157,000	$13,083	10/1/00 – 12/31/00
	FY 2000	$141,300	$11,775	01/01/00 – 9/30/00
	FY 2000	$136,700	$11,392	10/1/99 – 12/31/99

Please refer to our full description of Northwestern's implementation of the NIH salary cap for more details and budget examples. The official NIH announcement of the cap is a useful source document.