Applying the NIH/DHHS Salary Cap

  • The Consolidated Appropriations Act restricts the amount of direct salary to Executive Level II of the Federal Executive Pay scale for ALL DHHS awards. The Executive Level II salary has increased to $181,500 effective January 12, 2014. The salary cap applies to grants, cooperative agreements, and contracts from these Federal agencies.
  • Agencies under the DHHS umbrella:
    National Institutes of Health (NIH)
    Agency for Healthcare Research and Quality (AHRQ)
    Substance Abuse & Mental Health Services Administration (SAMHSA)
    Centers for Disease Control and Prevention (CDC)
    Health Resources and Services Administration (HRSA)
    Administration for Children and Families (ACF)
    Administration for Community Living
    Centers for Medicare and Medicaid Services (CMS)
    Food and Drug Administration (FDA)
    Indian Health Service (IHS)
  • For all DHHS awards, the applicable salary cap is determined by the Award Issue Date stated in the Notice of Award. The applicable cap takes effect on the Project Start Date for new and competing awards, and the Budget Start Date for non-competing awards.
  • The Institutional Base Salary is to be used to calculate salary; the agency will adjust the awarded salary subject to the current salary cap at the time of award.

The PHS SF424 R&R application instructions state the following for detailed budgets:  for Base Salary, "Enter the annual compensation paid by the employer for each Senior/Key person.  This includes all activities such as research, teaching, patient care, or other.”  For UM, this translates to Institutional Base Salary (IBS).  There is further clarification under the instructions for field name "Requested Salary”:  “Any adjustment for salary limits will be made at the time of award.”

Similarly, the PHS398 instructions require the Institutional Base Salary, and state that any adjustment for salary limits will be made at the time of award.

  • For NIH Modular Budgets: Since the modules should be a reasonable estimate of costs allowable, allocable, and appropriate for the proposed project, you must use the current legislatively imposed salary limitation when estimating the number of modules. NIH grants also limit the compensation for graduate students. Compensation includes salary or wages, fringe benefits, and tuition remission. This limit should also be used when estimating the number of modules.
  • The annual inflation increase should be applied to the budget as usual.
  • In the Yes/No questions, check YES for the question about the sponsor’s salary cap.
  • Uncheck the "Submit Cost Sharing" box on the Budget Summary screen.
  • For proposals to DHHS, when the IBS exceeds the salary cap, calculate the appropriate percent of salary to charge to the grant.  First, multiply the Federal salary level ($181,500) times the actual effort that the investigator proposes to commit to the project.  Then, take that result and divide by the investigator's IBS.  Use the answer to that calculation as the % Charged in the Personnel Budget Details ("Iron Man") screen, and use the actual effort as the % Effort.

    Example:  Investigator's IBS = $250,000.  Effort committed = 25%
    .25 x $181,500 = $45,375
    $45,375/$250,000 = .1815
    Enter 18.15% under % Charged; enter 25% under % Effort
    NOTE:  Coeus will add inflation as of 7/1 annually, even in Period 1.

  • A companion Project ID to track salaries that are over the salary cap must be requested during award set-up.  The chartstring for the companion account will reflect fund 147 - Standard "Over the Cap" Salaries.