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University of Wisconsin-Madison
NIH Salary Cap Guidance
Departments are responsible for ensuring compliance with any salary limitations
imposed by sponsors. This document provides guidance to assist departments in
complying with these requirements for NIH awards.
The National Institutes of Health restricts the amount of salary that can be paid to an individual from an NIH grant.
This is due to a legislatively mandated provision for the
limitation of salary costs. Links to the notices providing detailed information
about the limitation and a list of rates is available on the NIH
Salary Cap Summary page. Please refer to this page to determine what rate
is in effect for an award at a specific time.
Other funding agencies may include information about salary limitations in their program
guidelines, policy statements or award documents. Please review their guidelines/policies
to determine the level of the cap in affect for that award, and contact your
Dean’s Office research administration office for clarification if necessary.
Applications/Proposals
Proposals Requiring Detailed Budget
Grant applications that include a detailed budget in the proposal should reflect
the actual institutional base salaries for all individuals for whom funding
is requested. NIH staff will make the necessary adjustments to requested salaries
prior to issuing an award. Alternatively, applicants may provide an explanation
indicating that the actual institutional base salary exceeds the current salary
cap, and request dollars calculated based on the cap amount (as described below
for modular budgets).
Proposals Using Modular Budgets and SNAP Applications
For modular applications, and streamlined non-competing continuation applications (SNAP),
the current cap rate should be used for calculating salary for any individual
whose University rate exceeds the cap. For instance, if Professor X has UW salary
rate of $200,000, and proposes that she spend 50% of her effort on the project
proposed to begin during federal fiscal year 2006, she should refer to the NIH
summary page to find that the FY06 cap is $183,500 and request 50% of $183,500,
or $91,750 plus fringe benefits costs for that position.
Please also be aware at the time of proposal that the amount exceeding the
cap will need to be paid from a non-federal source having no restriction that
would preclude the payment of costs associated with the NIH-funded project.
In the example above, at least $8,250 of Professor X’s salary will need
to be paid from a non-federal source and the amount will be identified as “salary
cap cost sharing” toward the project.
Payrolling Staff Affected by the Cap When Proposals Are Funded
Prior to arranging to payroll the salary on a new or continuation award, the
department should determine in which federal fiscal year the award was made.
The “issue date” indicated near the top of the Notice of Grant Award
determines the fiscal year. The federal fiscal year runs from October 1st through
September 30th. Once you have determined which fiscal year funding will be used,
you may refer to the NIH
Salary Cap Summary page to determine the actual salary cap in effect for
your award.
The worksheet below will help you determine what may be charged to the grant
on a monthly basis, and what amount must be cost-shared from a flexible, non-federal
source. Worksheet
Effort Reporting
The UW’s current effort reporting system (PAR) requires certification
of only paid and mandatory cost-sharing. The salary cap cost sharing will not
appear on the effort report. For instance, in the example above, Professor X
will certify that she spent 46% of her effort on the project. Please be aware
that the remainder of the 50% commitment is cost-shared toward the NIH project,
and that you may be required to show documentation that it is paid from a flexible,
non-sponsored source in the event of an audit.
We expect to have a new effort reporting system (ECRT) available by mid-2007.
Within that system a mechanism for identifying and tracking salary cap cost
sharing will be available.
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